70% of companies oppose the idea of workers on boards, new poll finds

London, 10 October 2018 – A poll out today by ICSA: The Governance Institute and recruitment specialist The Core Partnership reveals that 70% of companies surveyed 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.

When questioned as to whether or not they had deliberated the UK Corporate Governance Code’s proposals for getting the workforce voice into the boardroom, 29% of companies have not yet considered them and 15% have, but taken no action. Of those companies that have considered the Codes’ proposals, 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.

“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,” says Peter Swabey, Policy and Research Director at ICSA.

Some of the issues highlighted by respondents are as follows: 

  • It is extremely difficult to get a fair representation of a global workforce from the appointment of one representative. It's far better to have involvement mechanisms where the board can have insight into the views of a larger number of workers and use that to inform their decisions
  • In financial services the regulatory burden would limit the number of viable candidates to such an extent it would be difficult to yield the desired workforce engagement
  • The employees will report to the CEO which limits what they will be authorised to say
  • The statutory requirement for directors to take into account employees in decision making in the UK through their codified duties makes the need for them to have board representation not so important.

Questioned about their views on other areas of board oversight in which companies should get workers and/or other stakeholders involved, responses included the following:

  • Health and safety and employee welfare
  • Nominations
  • Remuneration
  • ESG/CSR matters
  • Development of strategies and policies that are staff-facing
  • Risk.

- Ends -

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Notes to Editors:

  1. ICSA: The Governance Institute is the professional body for governance. We have members in all sectors and are required by our Royal Charter to lead ‘effective governance and efficient administration of commerce, industry and public affairs’. With over 125 years’ experience, we work with regulators and policy makers to champion high standards of governance and provide qualifications, training and guidance. Website: www.icsa.org.uk
  2. The Core Partnership is a niche market recruitment consultancy working with Company Secretaries and their teams to advise on and resource their specialist interim and permanent manpower needs. With relevant professional backgrounds spanning back to the 1980s, The Core Partnership has a wealth of knowledge of the development and dimensions of the role of the Company Secretary. The team provides market advice on relevant qualifications and experience, conducts salary and benchmarking exercises and works throughout the UK and overseas recruiting at all levels to this specific discipline. Website: www.core-partnership.co.uk 
  3. Previous ICSA-Core poll findings can be found at www.icsa.org.uk/knowledge/governance-and-compliance/indepth/comment/quick-question
  4. This poll is based on answers from 92 respondents across a variety of sectors.

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