Post‐crisis Corporate Governance and Labour Relations in the EU (and Beyond)

Date01 March 2014
Published date01 March 2014
DOIhttp://doi.org/10.1111/j.1467-6478.2014.00657.x
AuthorCharlotte Villiers
JOURNAL OF LAW AND SOCIETY
VOLUME 41, NUMBER 1, MARCH 2014
ISSN: 0263-323X, pp. 73±94
Post-crisis Corporate Governance and Labour Relations in
the EU (and Beyond)
Charlotte Villiers*
This article attempts to explain how corporate governance and macro-
economic policies have impacted on the role of workers and their
representatives in the corporate environment and to consider how this
has affected their capacity to protect themselves in the context of the
financial crisis. It also considers the strategies they might adopt to
strengthen their position in the future. It argues for the need to
reposition labour law in the legal hierarchy as a first condition but
also, and more importantly, that for democratic reasons, trade unions
need to work collectively with other civil society and protest move-
ments to hold corporations, national governments, and European
institutions to account and, internally, to develop the class
consciousness of old and new members.
INTRODUCTION
In country after country, workers are on the back foot, facing austerity
measures imposed by governments that have racked up massive public debt in
response to the crisis of private debt just a short time earlier.
Despite the self evident failure of neoliberalism, `the right wing narrative
has dominated'. And unions are finding it hard to be heard, as social dialogue
is under pressure, while non-governmental organisations are heard in
European forums, sometimes ahead of the unions.
1
This gloomy picture presented by Le Queux and Peetz indicates bleak
prospects for labour relations in the post-crisis corporate governance trajec-
tory. My objective in this article is to explain how corporate governance and
73
*University of Bristol Law School, Wills Memorial Building, Queens Road,
Bristol BS8 1RJ, England
C.Villiers@bristol.ac.uk
1 S. Le Queux and D. Peetz, `Between ``Too Big to Fail'' and ``Too Small to Matter'':
The Borderless Financial Crisis and Unions' (2 013) 34 International J. of
Manpower 198.
ß2014 The Author. Journal of Law and Society ß2014 Cardiff University Law School
macro-economic policies have impacted on the role of workers and their
representatives in the corporate environment and to consider how this has
affected their capacity to protect themselves in the context of the financial
crisis. Strategies they might adopt to strengthen their position in the future
are also considered. In part 1, I observe the problems in the corporate
governance system and their part in the financial crisis. Part 2 shows how
these problems, together with macro-economic policies, have impacted on
working conditions and worker involvement, and how the crisis itself has
further affected workers and their representatives across the EU. Part 3
explains the political and economic relevance of large corporations and seeks
to show why worker involvement is therefore also politically necessary. In
part 4, I outline the current obstacles to worker participation. Part 5 argues
for the need to reposition labour law in the legal hierarchy as a first condition
but also, and more importantly, that for democratic reasons, trade unions
need to work collectively with other civil society and protest movements to
hold corporations, national governments, and European institutions to
account and, internally, to develop the class consciousness of old and new
members. The crisis, according to Froud et al., opened `a window of oppor-
tunity for increased democratic control over markets'.
2
At this point, in the
aftermath of the crisis, such democracy in the market place has not been
achieved. Trade unions must not admit defeat. With other movements, they
have the capacity to democratize working-class organizations and to achieve
a more egalitarian society.
3
PROBLEMS IN THE CORPORATE GOVERNANCE SYSTEM
The global and the Eurozone financial crises had many causal factors.
4
Corporate governance cannot be blamed wholly for the crisis, but it has
played a part. There remain significant structural differences between the
Anglo-American model and some continental European models, not least
that between the co-determination boardroom structure found in Germany
which contrasts with the single-tier structure found in countries within the
Anglo-American model. Despite these continuing variations, a general trend
has emerged whi ch demonstra tes the increa sing signific ance of the
shareholders. This trend has led to claims that the Anglo-American and
74
2 J. Froud et al., `Wasting a Crisis? Democracy and Markets in Britain after 2007'
(2010) Political Q. 25, at 25.
3 S. Ross, `Social Unionism and Membership participation: What Role for Union
Democracy?' (2008) 81 Studies in Political Economy 129, at 153.
4 See, for example, J. Bellamy Foster and F. Magdoff, The Great Financial Crisis:
Causes and Consequences (2009); J. Crotty, `Structural causes of the global
financial crisis: a critical assessment of the ``new financial architecture'' ' (2009) 33
Cambridge J. of Economics 563; G. Kirkpatrick, The Corporate Governance
Lessons from the Financial Crisis (2009).
ß2014 The Author. Journal of Law and Society ß2014 Cardiff University Law School

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