Who Is Undermining Employee Involvement in Postsocialist Supervisory Boards? - National, European and International Forces in the Revision of Hungarian Company Law*

Zusammenfassung

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This article explores regulatory developments with regard to employee representation in post-socialist corporate governance systems of Central Europe. It sets out to weigh the applicability of different theories on postsocialist industrial relations that focus on domestic, European and international forces. It pays special attention to the Hungarian case and studies regulatory developments in the early 2000s, with a focus on the third postsocialist Company Law of 2006. The article argues that the law reform undermines effective employee representation in postsocialist corporate governance systems. It concludes that these developments can only be adequately understood as the result of the interplay between various social forces at the national, European and international level.

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Auszug

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Who Is Undermining Employee Involvement in Postsocialist Supervisory Boards? - National, European and International Forces in the Revision of Hungarian Company Law*

Introduction

In his seminal article Round up the Usual Suspects!: Globalization, Domestic Politics and Welfare State Change, Herman Schwartz (2001) explores the driving forces behind the assumed welfare state retrenchment in Western Europe. Plotted as a whodunit, Schwartz's article discusses different explanations in the literature behind the decline in 'covert provision of social protection for both capital and labour through service sector regulation' (Schwartz 2001:43). Schwartz proposes an elegant way of discussing rival hypotheses. He juxtaposes well-known theoretical lenses on welfare retrenchment to find out how far each of these approaches travel in the light of concrete empirical evidence.

This paper adopts the same approach to the field of labour representation in postsocialist supervisory boards. It seeks to explore how and to what extent existing theories on postsocialist industrial relations can help us to understand this under-explored field. Whereas the literature on postsocialist industrial relations is rather united in its view that organised labour is amongst the losers of the economic restructuring process, there are three contradicting explanations for this phenomenon. First, there are those who relate the weakening position of organised labour to primarily domestic circumstances (Ost 2000; Crowley 2004; Crowley/Ost 2001; Avadevic 2005). Second, there are accounts that stress the importance of the European Union on postsocialist industrial relations. They argue that the European Union has had considerable leverage, both through formal and informal influence, on the emerging postsocialist institutions (Vickerstaff/Thirkell 2000; Meardi 2002). Third, there are analyses that stress the importance of transnational corporations in the formation of postsocialist social relations (Bohle/Greskovits 2006/2007). In comparison to Western Europe, labour in Central Europe is in a weak position as the comparative advantages of the region rest upon the ability to compete with other economies on wage levels, and because of the fact the Central European states are highly dependent on foreign capital for industrial upgrading and development.

Concretely, this study turns its attention to the process of deregulation of important aspects of Hungarian company law, which further undermines the position of labour in corporate dec...

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