Employee involvement in a very general sense is by and large an accepted policy goal in the European Union. Its forms nonetheless vary considerably among Member States and sometimes include boardroom representation. Board composition, performance and incentive structures are core areas of the ongoing corporate governance debate in Europe and most other parts of the world. These two discourses are rather disparate. Recent EC legislation and jurisprudence do not proactively pursue an integrated approach. The following paper maps out overlapping areas of employee participation and corporate structure, explores some theoretical underpinnings for employee involvement from a contract-theory perspective and analyses issues specific to internationally engaged corporate groups. Finally, a transaction-based approach for modernisation of employee involvement is suggested. Preference is given to default rules that do not require employees to be represented at board level yet leave room for agreements to that effect. The plasticity of private law, the resilience of the corporate form and the governance-assisted employment relationship can defy petrification. Transaction-based employee involvement promotes a productive conjunction of corporate governance components consonant with the specific character of the employment relationship. An evolutionary approach to reform requires flexible legislation instead of deference to existing models. However, consensual model building needs proper enabling tools. Academic groundwork in private international law, contract, labour and corporate law is called for.

Imagine yourself sitting in the Berlin Philharmonic Hall, listening to a concert given by the Berlin Philharmonic Orchestra. On the stage-bill is the Second Piano Concerto by Johannes Brahms. I especially like this concerto because it comes as a nice double pack: Hidden in the third movement is a wonderful cello concert. Therefore, you can be sure that this important cello-solo will be played by Dr. Faust, the first solo-cellist of the Berlin Philharmonic, on an original Stradivari from 1798. Dr. Faust discovered this extraordinary instrument on one of the many tours of the Orchestra. His enthusiasm, however, was immediately dampened as he realized that neither he personally, nor the Orchestra, nor the Association of the Friends of the Orchestra, could afford to buy it. But then, Dr. Faust recalled a recent conversation with Hilmar Kopper, at that time CEO of Deutsche Bank AG. The Deutsche Bank, a public stock corporation, showed public spirit and financed the cello.

The project “Corporate Group Law for Europe” is a joint effort of European specialists in company law, the “Forum Europaeum”. This Forum consists predominantly of legal scholars who, at the same time, enjoy close ties with corporate practice. We should welcome the initiative and appreciate the tremendous amount of careful work that went into producing this document.