Introduction

Corporations can have widely differing forms. Against the backdrop of the peculiar German system of codetermination, we can illustrate the law and economics rationale behind different types of board composition. Boards are split into two, the managing and the supervisory boards. Works councils elect the powerful chairmen, who can end up on supervisory boards and, more importantly, the steering committees. In addition, investment bankers may join forces with employee representatives in controlling management ap­pointments. How did this system come about, which events shaped it, and why is it being continued by globally operating companies?