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Companies failing to bring workers to the board

09 May 2019 #Employee relations

A report released by the Local Authority Pension Fund Forum (LAPFF) has revealed that just 5% of companies would appoint an employee to their board of directors, despite a push by the Government to improve employee participation in board meetings.

Under the Corporate Governance Code, companies are asked to strengthen the “employee voice” in boardrooms. Suggestions on how to do so included appointing an employee director, creating a formal workforce advisory panel and appointing a designated non-executive director (NED).

73% of the companies surveyed had opted for the latter option, prompting criticisms by the LAPFF for their lack of imagination on how to improve workforce engagement. NEDs are often appointed from the same circles as the other executive directors, which risks leaving the workforce feeling as though they are being left behind. While some public companies have already appointed employee directors, including Sports Direct, the LAPFF hopes for improvement as companies realise the benefits of such engagement.

Employee engagement is something all companies can review and improve.  It offers a range of benefits, including an insight into whether certain practices are working, and where potential issues may arise in future.

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Ciara Duggan

Ciara Duggan

E: cduggan@clarkslegal.com
T: 02075398052
M: 07786655903