An unusual law that shapes the oversight of German companies is again being re-examined after corruption scandals at Siemens and Volkswagen, even as more companies are finding ways to skirt it. Under German law, companies are required to give as many as half of their supervisory board seats to labor representatives. That increasingly appears to lead to conflicts of interest and even to cases of bribery in corporate Germany, because executives need a supervisory board?s support to keep their jobs and carry out strategy. At Siemens, a top executive was arrested last week and accused of funneling $45.3 million to the coffers of a labor union represented on the board, seeking to gain favor.
See "German Industry Would Alter Law Requiring Labor Seats on Boards", G. Thomas Sims, The New York Times, April 5, 2007