employee co-determination, which is a practice that is required by law in Germany. This procedure involves the close cooperation between management and employees that is necessary to bring long-term success to the company. Companies also can voluntarily create Works Councils, which are a democratically elected group representing all company employees. Such councils represent only the interests and needs of workers employed by the company, and therefore they differ from trade unions, which protect a wide spectrum of people and have a more political agenda.

The Works Council model seems to operate particularly well with the two-tier board system, which is a corporate structure required for listed companies in Germany. The two-tier model is a prerequisite for Works Councils to be really effective because it includes a management board that is overseen by a supervisory board. Representatives of employees and shareholders also sit on this board.