Companies against the idea of workers on boards

Most companies think that having workers on boards is not a good idea and the majority are not planning to introduce this approach, according to research from ICSA: The Governance Institute in the wake of proposed changes to the UK Corporate Governance Code

The poll of some 100 companies, conducted with recruitment specialist The Core Partnership found that 70% feel that having workers on boards would not be a good idea. Only 13% of respondents think that it would be a good idea and 16% are unsure. Furthermore, 91% are not considering having workers on their board.

Over a quarter (29%) of companies have yet to review the new Corporate Governance Code proposals. Of those that have, 25% favour the designated non-executive director option, 14% are inclined to combine one or more of the options, 7% are in favour of a works council or similar, 5% have other ideas, 2% would prefer to have an employee on the board and 1% are unsure.

Peter Swabey, policy and research director at ICSA, said: ‘While there is an overall feeling that it is crucial that the board hears and takes note of the views of staff and other stakeholders, respondents believe that there are mechanisms other than a seat at the board table that will allow them to do so.

‘There are some concerns about the practicalities, for example the statutory directors’ duties mean that the individual has wider responsibilities than simply to act as a “representative” of the workforce.

‘Furthermore some companies have a large number of employees across multiple sites and a diverse workforce in terms of skill base and level of technical or professional expertise and they might have different needs, interests and priorities.’

Respondents expressed concerns about the difficulty of getting a fair representation of a global workforce from the appointment of one representative, while in the financial services sector, some felt the regulatory burden would limit the number of viable candidates to such an extent it would be difficult to yield the desired workforce engagement.

Report by Pat Sweet

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