Spain lags behind the rest of Europe in worker representation within companies

MadridDemocratizing corporate governance—decision-making—is the banner that Second Vice President and Minister of Labor, Yolanda Díaz, raised almost a year ago with the creation of a group of experts to put in writing how the process could be improved. representation and participation of workers in the governing bodies of companiesStarting with the boards of directors. The mandate was to outline the main principles of a reform that guarantees employee access to these spaces and even to company ownership.

After months of research, the committee has not only drawn up the foundations of this future law, but has also found that Spain lags behind the rest of the European Union in terms of recognizing workers' rights in terms of representation, participation, and access to company ownership. This is one of the main conclusions of the nearly 500-page report that the committee prepared and presented this Monday, together with the Minister of Labor. "In Spain, we remain stuck in a model where [worker] representation in companies is weak," stated Díaz, who advocated taking "a step forward" in the democratization of companies. "A democracy that stops at the doors of the workplace is an incomplete democracy," she reiterated. To assert that Spain lags behind the rest of Europe, the group of researchers compared Spanish legislation with that of other European countries. In most countries, in addition to the right to information and consultation for employees, the legally recognized right of workers to be represented on company boards of directors and to participate in strategic decisions at the corporate governance level, a practice known as co-management, is recognized, the experts point out. "In 13 of the 27 European countries, these rights extend to both private and public companies. Spain is among a minority of six countries where these rights are only recognized, and weakly so, in public companies," the report concludes. The experts recommend that the Spanish government adopt the co-management model and propose that in companies with between 50 and 1,000 employees, one-third of the board seats should be held by employees. In larger companies, they should occupy half of the positions on this governing body.

Who owns it?

But the researchers have not only focused on power structures, but also on access to company ownership. In this regard, they propose a plan for employees to control a portion of company shares: at least 2% of the shares in companies with 25 or more employees. "With a third of business owners [of Spanish SMEs] about to retire, Spain needs a plan to safeguard productive assets," stated sociologist and coordinator of the expert committee, Isabelle Ferreras, who will present the report this week at Harvard University. Following Monday's presentation, it's time for social dialogue. Díaz wants to establish a negotiating table with the major employers' associations and unions to address this reform, which is part of the coalition government agreement between the PSOE and Sumar parties. In fact, the minister justified the legislative change in company governance because the Constitution includes it in Article 129.2, although it is not fully developed, according to the ministry. However, Díaz has not committed to a timeline and has stated that she wants it to happen in a "short period of time." She also pointed out that some companies already operate under a co-management model—this is the case, for example, with many cooperatives or even the public company Navantia. "Nothing has been broken," she asserted.