The Ethics of Banking: Conclusions from the Financial Crisis (Issues ...

Corporate Governance by Consensus and by Competition 81
by competing management teams would have the effect of raising their business
performance.
This does not rule out retaining the mechanism of codetermination as a form of
workforce representation and involvement in corporate management. The rules of
codetermination do not negate the principles of ownership and shareholder value,
but explicitly confirm the owners’ majority rights and therefore ultimate decisionmaking
rights on the supervisory board of the joint-stock corporation. In conjunction
with the control principle of the hostile takeover, the codetermination principle – as a
principle of representation, not consensus – can raise the corporation’s performance.
Codetermination as labor representation increases the organization’s capacity to
learn and also performs a placatory function when conflict situations arise within
the corporation. 15
The synthesis between the Anglo-American principle of the capital market as a
market for corporate control and the German principle of codetermination as workforce
representation in the management of the corporation is also tenable – and
performance-enhancing for the corporation – under the conditions of globalization.
This is, in all probability, superior to both the pure capital market model without
codetermination and to the pure codetermination model without hostile takeovers
via the capital market. Globalization may well force company law in the EU and the
USA in the direction of such a synthesis.
15 On the precondition that the unions see themselves not as adversarial unions, i.e. industrial relations
partners who are hostile to the owners, but as non-adversarial unions cooperating in corporate
management, which can be said of the German trade unions. On the critique of the concept of the
adversarial union, cf. RICHARD A. POSNER: A Failure of Capitalism. The Crisis of ’08 and the
Descent into Depression, Cambridge, MA (Harvard University Press) 2009, p. 224.