Central management of the enterprise

Central management of the enterprise is a description of the decision-making function in an enterprise; it is not a formal body in corporate law. For example, in the European Works Councils Directive (Council Directive 94/45/EC of 22 September 1994) central management denotes ‘the central management of the Community-scale undertaking or, in the case of a Community-scale group of undertakings, of the controlling undertaking.’ However, the assumption of a centralised management may not be entirely accurate in the case of employment and industrial relations matters. For example, personnel policy decisions within multinational corporations cover different types of decisions, which tend to be taken at different levels.

This has encouraged EU regulations to use the terms ‘appropriate’ or ‘relevant’ level of management instead. For example, Council Directive No. 2002/14, establishing a framework for informing and consulting employees in the European Community stipulates that, ‘Consultation shall take place… at the relevant level of management and representation, depending on the subject under discussion.’ Article 5 provides that ‘Member States may entrust management and labour at the appropriate level, including at undertaking or establishment level, with defining freely and at any time through negotiated agreement the practical arrangements for informing and consulting employees’.

see also: collective redundancy; consultation in the enterprise; corporate governance; corporate structures; restructuring; European Works Councils; special negotiating body; transnational enterprise.