Codetermination and ESG governance measures provide complementary, but differing approaches to broadening stakeholder representation in corporate governance.

“Theoretically, codetermination and ESG provide a similar benefit, while suffering from inverse drawbacks. Both systems provide a check on short-termism and the resultant inclination to favor profits over ethical obligations to stakeholders.212 Codetermination gives a particular stakeholder—labor— power to bargain with the rest of the board, who represent shareholder interests.213 The ESG movement, on the other hand, pushes boards to consider stakeholders in their corporate policies, and its flexible nature allows boards to adapt to changing financial, social, and environmental conditions.”