Employees, Governance and Society

Employees are the core of society and are source of information and influence other stakeholders.  Today, we observed the contrasts of the theme as perceived across borders, while listening to Mr. Alain Champigneux (France), Prof. Christoph Schneider (Germany) and Ms. Eri Shikanura (Japan).

Initially, Mr. Champigneux addressed the French approach to employees representative on French boards, from mandatory and legal initiative showing a consultative voice back in the 40’s to the deliberative voice employee elected representative today.  Under his SWOT analysis, employees are highly motivated stakeholders, grant good ideas from inside and promote decisions taken by controversy, all as strengths.  As weaknesses, however, he pointed the mismanaged trade unions, reflecting the tradition of conflict in France. Mr. Champigneux perceives the need for a new governance model, particularly across borders, as opportunities for employees centered companies, because different points of view are already part of their decision making process.  Finally, the threat pointed out is that, once in global business, geographic liquidity as borders become blurred and mobility less costly.

In addition, Prof. Schneider told the audience with how legal regulation differs across the world, but showed that most countries have no legal regulation on employee participation on boards.  The contrast between the American and European approach is particular clear over this matter, while the first tend to consider workers on boards as a threat to equity and the latter consider a longer term partnership.

Prof. Schneider also pondered the trade-offs brought by the issue.  On the bright side, employee involvement on the core decision making means insurance against shock, thus reduce risk taking.  The interesting findings of his research show that parity codetermined companies are insurance like and part of the premium is paid by employees.  Within these firms, specific investment made by employees is more likely, meaning longer term specific contracts.  On the other hand, these companies tend to deal more with conflict of interest, as managers and workers may not be on behalf of shareholders.

Ms. Eri Shikanura ended the panel displaying four contrasting case studies of Japanese companies, where typically there is strong representation of employees. Toyota was shown as a successful in employee empowerment, thus dealing greatly with internal source of strong employee influence.  Nissan, after its turnaround, realized merits and decrease demerits, by observing performance oriented labors and proper leadership. Japan Airlines in a contrasting scenario after bankruptcy went from badly designed contracts, to realizing merits and minimizing demerits of its workforce.  And lastly, Tokyo Electrical Power Company after the tsunami crisis, where the nuclear department was actually a silo within the company, prevented the leadership from exploring more sharply its teams merits.

The general takeaway was that there is not much to be feared.  Close relationships to unions and wise choices can easily be rewarded and diversity means other source of discussions within a more complex environment, which is what business faces today.

November 16, 2012 by Cristiano Cittadino Oliveira/ Fundação Getulio Vargas #CouncilBusinessandSociety

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One Response to Employees, Governance and Society

  1. Julia Antunes says:

    It looks like it was an interesting debate about a subject that scares some companies.

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