2016 12 – worker representation on company boards

ALL ABOARD – Making worker representation on company boards a reality

Janet Willamson, Senior Policy Officer, TUC.

We publish below the Executive Summary from the above report. This was mistakenly omitted from the  Labour Affairs November issue. The full report can be accessed on the TUC website www.tuc.org.uk

Executive summary

This report sets out the case for worker representation on boards, how it works in practice in other European economies, and how it could be put into practice in the UK.

The case for worker representation on boards

Enhancing the quality of board decision-making

Workers have an interest in the long-term success of their company; their participation would encourage boards to take a long-term approach to decisionmaking.

Worker board representation would bring people with a very different range of backgrounds and skills into the boardroom, which would help challenge ‘groupthink’.

Workers would bring the perspective of an ordinary worker to bear on boardroom discussions and decisions; evidence from countries with worker board representation shows that this is particularly valued by other board members.

Workforce relationships are central to company success, and worker board representation would help boards to manage these key stakeholder relationships more effectively.

The importance of voice

Workers’ interests are affected by the priorities and decisions of company boards and it is therefore a matter of justice that they should be represented within those discussions.

Representation in practice

Evidence from Europe

Worker board representation is in place across most of Europe; the UK is one of a minority of European countries with no rights for workers’ voice within corporate governance.

In 19 out of 28 EU Member States plus Norway (i.e. 19 out of 29 European countries) there is some provision for workers’ representation on company boards, and in 13 of these countries the rights are extensive in that they apply across much of the private sector.

There is no one model of workers’ board representation across Europe, and the way in which it operates varies from country to country