PM must deliver promise for worker board representation

Speaking at the Conservative Party Conference this year, the Prime Minister repeated her commitment to introduce worker representation on company boards, a policy supported by the TUC.

The Prime Minister used her speech to the CBI in November to appear to dilute her previous commitment to put workers on company boards.

There are three key tests by which the TUC will judge the government’s commitment to worker on company boards;

• Will the proposals be mandatory?

In every country across Europe where worker board representation is in place, it is a legal requirement. Making worker board representation mandatory for companies over a minimum size will create clarity and certainty for all involved and is the best way of ensuring the benefits of the measure are shared as widely as possible. Workers on boards would quickly become part of a new, and better, normal.

• Will worker board representatives be members of the workforce and elected by the workforce?

Suggestions that others could be nominated to speak on behalf of workers within the boardroom are not only patronising, but in addition they will not bring the benefits that worker board representation can deliver. Worker board representation must mean what is says – members of the workforce elected by the workforce to sit as directors on company boards, sharing the same fiduciary duties as other board members.

• And finally, will the worker representatives sit on the main board?

Anything else will not be worker board representation and would represent the Prime Minister breaking the commitments she made both during her election campaign for Conservative party leader and in her speech at the Conservative Party Conference.

Sadly, there was a glaring omission in last week’s Corporate Governance Green Paper and its failure to include any proposals to deliver on Theresa May’s promise to put workers on company’s boards. This represents a huge missed opportunity to put in place a different model for British business, which would bring benefits for companies, for working people and for the country as a whole.

Given the expectations that have been raised by the PM’s repeated promises to put workers on boards and the increasingly broad consensus that significant reform is needed, this is a missed opportunity to create a corporate governance system that works for everyone and is fit for the 21^st Century.

The Green Paper has a section on strengthening the employee, customer and wider stakeholder voice. There are two main options proposed for putting this into practice: creating stakeholder advisory panels and designating non-executive directors to ‘provide an independent and clear voice for key interested groups’.

The TUC will continue to press the government to deliver on the Prime Minister’s repeated promise to have workers represented on company boards. By which we mean workers, elected by other workers, sitting on company boards. We don’t mean people who are not workers, chosen by people who are not workers, speaking on behalf of workers, sitting on company boards. And we don’t mean workers sitting on advisory committees either.

In many of Europe’s most successful economies, worker representation on company boards is an accepted and valued part of doing business. If introduced in the UK, it could bring significant benefits here too.

Beth Farhat

TUC Northern Regional Secretary