German giants increasingly sidestep co-determination rules, study finds

The IMU, linked to the Hans-Böckler Foundation, reports that an increasing number of German large enterprises are circumventing the 1976 co-determination law, which mandates equal shareholder and employee representation on supervisory boards. By 2025, just under 57 % of firms subject to the rule maintained parity, a decline from about 60 % in 2022 and over 67 % in 2019. Of the 503 companies lacking parity, 285 use legal loopholes—often by restructuring as European Companies (SE) or SE & Co KG—to fall outside the law’s scope, affecting roughly 2.1 million employees.

Another 218 firms, employing about 1.1 million workers, disregard the requirement outright, citing weak enforcement. The study notes that family-owned businesses are especially prone to avoidance, and upcoming EU proposals for a new “EU Inc.” form could further erode co-determination unless national legislation is tightened.