German large companies increasingly bypass co-determination laws

New data from the Institute for Co-determination and Corporate Governance (I.M.U.), part of the Hans-Böckler-Stiftung, indicates that an increasing number of large German companies are bypassing co-determination laws.

At least 3.18 million employees across approximately 500 large companies are currently being denied parity-based co-determination on supervisory boards. This figure represents an increase of roughly 700,000 employees compared to 2022. Under the Co-determination Act of 1976, companies with more than 2,000 employees are generally required to seat an equal number of shareholder and employee representatives on their boards.

Sebastian Sick, a corporate law expert at the I.M.U., stated that the proportion of large companies practicing co-determination is likely at its lowest point since the law's inception. In 2025, only about 57 percent of eligible large companies maintained parity-based boards, down from 67 percent in 2019. Experts suggest that companies are increasingly utilizing legal loopholes to circumvent these requirements.