In Germany, the establishment of supervisory boards and, therefore, of boardlevel employee representation are mandatory, depending on the legal form and size of a company. However, empirical analysis reveals that the majority of companies observed (limited liability companies with 500 to 2000 employees active in the West-German service sector) do not satisfy the law. An econometric analysis of the determinants of supervisory board existence provides a potential explanation for the gap. It can be shown that the legal form of the principal share holder, and employment size, influence the probability of the supervisory board existence. A company's age, however, in this context is irrelevant.