Bosses take aim at a holy cow 

Germany may not yet be ready to slaughter the holiest of cows - its Mitbestimmung or co-determination laws giving employee representatives half the seats on supervisory boards - but the corporate sector is sharpening its knife. 

In the face of hostility from trades unions and the government, the BDI industry federation and BDA employers' federation will next month propose a radical overhaul of Europe's most extensive worker participation system. 

Under their draft law, instead of half of supervisory board seats going to employee representatives in companies with more than 2,000 workers, companies and staff would decide what form of representation they wanted. If they disagreed, employees would have a third of seats. 

Co-determination was first introduced in the British postwar occupation zone and went nationwide in 1976. Supporters, including several company bosses, say it has helped Germany manage change through consensus. The problem is that Germany has not changed fast enough and now faces drastic measures at companies such as Adam Opel and KarstadtQuelle. 

Mitbestimmung has resulted in large, cumbersome boards ill-suited to quick decisions. It creates conflicts of interest for staff representatives who have to weigh company and employee interests. It creates a barrier to cross-border mergers and puts Germany at a disadvantage in attracting investment. 

Rapid reform is unlikely since Gerhard Schröder, the chancellor, is opposed. Even some modernisers would rather see EU legislation, such as the new European Company Statute, create pressure for reform. That may be far too slow.

Financial Times 25 October 2004