According to a new report published by Tomorrow’s Company there is a need for stronger employee voice on boards to ensure long-term business success.
In its new report, ‘Bringing employee voice back into the boardroom – a practical and flexible way forward’, the think tank presents the government with two options of how employee voice can be increased in company governance structures. Either employees can work as directors on the board, or as an alternative, companies would set up employee advisory panels with strong channels of communication to the board.
The government has made a prominent pledge to reform corporate governance in the UK. As part of this, Theresa May has put employee representation on boards at the forefront of these discussions.
Our research and discussions with business leaders in other European countries suggests there are many benefits that should not be ignored.
“The reaction from business is usually that this would never work here. We need to be more open minded. Our research and discussions with business leaders in other European countries suggests there are many benefits that should not be ignored. We put forward a practical and flexible solution that would capture these benefits in a manner that would work in the UK”, comments Laurie-Fitzjohn Sykes, director of research at Tomorrow’s Company.
The think tank argues that the most sensible way forward would be to require companies to increase employee voice but to allow for flexibility on the adaptation. This, according to Tomorrow’s Company, would be in tune with the UK’s long history of driving innovation in corporate governance through flexibility.
Commenting on the release, Mark Goyder, chief executive and founder, Tomorrow’s Company said: “Tomorrow’s Company has long argued for a stronger employee voice on boards. But it is important that any change made by government strengthens the UK’s unitary board on which all directors work together to promote the long term success of the company. Flexibility and practicality are vital: our report shows the PM how she could use the reforms to stimulate real culture change.”