Workers on company boards could be law within a year, says TUC report

Theresa May’s commitment to have workers on company boards could be law “within a year”, according to a new TUC report published today (Sunday).

The report, which comes just two months after the Prime Minister the announced the policy, sets out the case for worker board representation and detailed proposals for implementation.

All Aboard: Making worker representation on company boards a reality sets out:

• A timetable for implementation: The TUC says that if Theresa May begins a consultation shortly after Conservative Party Conference, the policy could be on the statute books within 12 months.

• Scope: The new law should apply to all firms with workforces of over 250, and could be phased in gradually, starting with larger businesses.

• Quotas: The report calls for a third of company board members to be worker representatives, who should be directly elected by their colleagues.

The report finds that similar requirements are in place in 12 other EU member states, including Germany, Sweden, Austria and the Netherlands. Surveys there reveal that the majority of businesses viewed employee representatives on the board positively.

The TUC says that allowing workers to sit on company boards would encourage the long-term success of individual firms, as both employees and directors worked together in the interests of long-term company performance.

The TUC argues that the current approach of relying solely on shareholders to hold companies to account has delivered neither economic success nor social justice.

Commenting on the report, TUC General Secretary Frances O’Grady said:

“The TUC stands ready to work with Theresa May to make workers on boards a reality. If the political will is there, this policy can be on the statute books within a year.

“The European experience shows that improving worker representation is not something for UK firms to fear. It helps improve company performance.

“These are common sense plans. Those on the shop floor have a clear interest in the long-term success of their companies and deserve a bigger say.

“Seats for the workforce on company boards would do much to improve the reputation of corporate Britain. It is essential the Prime Minister holds her nerve and resists any calls to water down the proposals.”

ENDS

Case study:
First Group plc, a FTSE 250 transport company with over 110,000 employees, has had an employee director on the board since its foundation. Mick Barker serves as the “employee director”, and has worked as a railwayman for 39 years.

Notes to Editors:
- The full TUC report, All aboard: how to make worker representation on company boards a reality (PDF)
- “[W]e’re going to have not just consumers represented on company boards, but workers as well.” – Theresa May, 11 July 2016
- All TUC press releases can be found at tuc.org.uk/media
- TUC Press Office on Twitter: @tucnews