Board sustainability expertise: how shareholder and employee representatives shape supervisory board practice in codetermined German firms

Purpose This paper asks how sustainability expertise is constructed, distributed across shareholder and employee representatives and translated into influence through the governance channels of parity codetermined supervisory boards in German listed corporations, as European sustainability regulation and scrutiny intensify. Design/methodology/approach Thirty-six semi-structured interviews with supervisory board members in parity codetermined listed corporations are analysed abductively through an integrated resource dependence and resource-based perspective. The analysis treats the two theories as jointly explaining how externally oriented resource dependencies and internally grounded capabilities are combined within board processes, tracing how directors construct sustainability expertise, how it is allocated across shareholder and employee benches, and how it becomes consequential through formal and informal governance channels. Findings Sustainability expertise is constructed less as an individual credential than as a collectively developed board capability combining regulatory literacy with operational understanding. Shareholder representatives tend to supply externally oriented regulatory and capital-market knowledge, whereas employee representatives contribute firm- and workforce-grounded implementation insight and longer time horizons. Codetermination thereby broadens the board's resource base but holds these logics in productive tension. Expertise becomes influential only when channelled through committee mandates, agenda-setting authority and informal cross-bench coordination. Boards vary, however, in whether these channels confine expertise to defensible compliance or open it to strategic integration. Research limitations/implications The study is context-specific to large German parity codetermined listed corporations with a mandatory two-tier system. Because strategic sustainability integration unfolds over longer time horizons than a single interview phase can capture, future longitudinal research could trace how the governance channels identified here shape integration over time and across corporate governance regimes. Originality/value This paper opens the boardroom black box by theorising sustainability expertise as a dynamic, collective board capability and by specifying the mechanisms through which it is constructed, reconciled across competing resource logics and mobilised into influence. It shows how codetermination, by combining distinct shareholder and employee resource bases, conditions whose expertise counts and how it is converted into influence.