Sir Brendan Barber, the chair of Acas, gives his thoughts on workers on boards.
Following through on the recent EU referendum is going to throw up huge challenges but the result has also provoked a real debate about what lay behind the decision so many voters made to support leaving the European Union. A host of factors have been cited. Most commentators have highlighted concerns over immigration as a key factor but many have also discussed a much broader sense in many communities of alienation, of a rejection of the political and economic elites, of a feeling amongst many people of a lack of a stake in society, and a loss of any control over their communities and economic prospects.
As part of the political response to this it was striking that in her Conservative leadership campaign Theresa May talked about how big changes need to be made to deliver an economy that works for everyone. She ranged over many issues, including productivity and investment in infrastructure, energy policy and industrial strategy. She also talked about new measures to change the way decisions on top pay are made and the growing gap between rewards at the top and bottom which she described as ‘irrational and unhealthy.’
Perhaps the most surprising thing she also spoke of was her intention – if she became Prime Minister – to have not just consumers but also employees on company boards. Of course there is nothing new about the idea of workforce representation on boards. There are longstanding tried and tested arrangements elsewhere in Europe for worker directors. And of course we have debated the idea in this country in the past. I recall in the 1970s the Bullock report which proposed such change, but never gathered the political support at that time to see through its proposals.
Perhaps this time, when the political climate has been so shocked by the largely unexpected referendum result, real change may be imminent. That possibility will, I hope, stimulate a thoughtful debate on a number of significant practical issues on the question of board representation. If worker directors are to make a difference and be able to inject a different perspective into boardroom deliberations, how can they best be trained and supported to play that role? In large, complex organisations is one seat at the table enough? Crucial too will be thinking through how they will be appointed. What will be their selection or election process? And if they are expected, amongst other things, to reflect workforce views and concerns, what facilities will they have and how will they be resourced and supported to keep in touch with workforce opinion and to be held accountable, while of course fully respecting appropriate commercial confidentiality requirements. And in organisations with trade union organisation and recognition how should those arrangements relate to any new boardroom structures?
And what issues does all this pose for company law and the responsibilities of all company directors. The Prime Minister spoke boldly about this issue as just one element in reforming boardroom culture and practice, as one part of giving ordinary people a greater stake, and greater sense of control over their own lives. I don’t think anyone is suggesting that workers on boards is an alternative to good employment relations but it is an issue that deserves serious consideration. Acas stands ready to play a part working with employers, unions and others to help promote, the wider debate needed on these issues over the coming months.“