In an interview with the Frankfurter Allgemeine Zeitung (FAZ, 01/10/2003, page 13), the chairman of the German Government’s Commission on Corporate Governance, Theodor Baums, commented on some consequences of the ECJ’s ruling in “In re Inspire Art” (C-167/01) for Germany.

Professor Baums told the newspaper that the ECJ’s decision enabled a competition of corporate governance regimes within Europe. Although the rules on co-determination have not been expressly mentioned by the court, the German Federal Government should not try to impose those rules via an “outreach statute” on foreign companies immigrating to Germany. According to the law professor from Frankfurt University, this should especially not be done in cases where the majority of employees is working abroad.

Such a step would render Germany unattractive for holding companies or for mergers of bigger medium-sized enterprises. Possible gaps in the legislation after the ECJ’s decision should not be filled by questionable means. Only clear-cut cases of circumvention of the rules on co-determination could possibly be handled by an outreach statute. Professor Baums also pointed out that some big US corporations like Dow, United Parcel Service and Ramada Hotels are already able to do business in Germany without being co-determined due to a bilateral treaty between Germany and the United States dating from 1954.