Outsourcing giant Capita has appointed two employees as non-executive directors, becoming the first FTSE 250 company since the late 1980s to appoint workers to its board.
Lyndsay Browne and Joseph Murphy will join the board as employee directors from 1 July 2019, with an initial appointment period of three and two years, respectively.
Browne, a chartered accountant, has been at the company since 2003. She is a finance manager in Capita’s Insurance Services division, working closely with the operations directors.
Murphy is a chartered civil engineer and joined Capita in 2015. He is a project manager in Real Estate and Infrastructure, where he carries out technical due diligence and advises on infrastructure projects.
Sir Ian Powell, chairman, said: “I am delighted to welcome Lyndsay and Joseph to the board and proud that Capita is the first FTSE 250 company in many years to make such appointments.
“We are determined that the employee’s perspective and increased diversity of thought are represented at board level. Lyndsay and Joseph bring very different skills, experience and insights. I have no doubt they will prove strong members of the board.”
Their appointment follows an extensive recruitment process across Capita’s 63,000 staff. Employees with two years’ continuous service were eligible for the roles and almost 400 people applied.
Theresa May vowed to put worker representatives on boards of major companies and to impose stricter limits on executive pay when she became prime minister in 2016, but the plans were shelved last year and UK firms have been accused of dragging their feet on the issue.
Workers are represented on the boards of companies in many European countries including Germany, Denmark and Sweden. It is argued that worker voice can help executive teams prioritise long-term decision making, ahead of short-term financial engineering.
“The people who run big businesses are supposed to be accountable to outsiders, to non-executive directors, who are supposed to ask the difficult questions,” said May at the time.
“In practice, they are drawn from the same, narrow social and professional circles as the executive team and – as we have seen time and time again – the scrutiny they provide is just not good enough…We’re going to change that system – and we’re going to have not just consumers represented on company boards, but workers as well.”
In their non-executive roles, Capita said Browne and Murphy will provide an employee’s perspective and expertise, and input into strategic decision-making with the same level of authority as other directors. Both will continue in their current day-to-day roles, with time allowances made for them to fulfil their employee director responsibilities.
They will receive the same remuneration – £64,500 per year on top of their current salaries – as other non-executive directors, and will be trained for their new roles.
The outsourcing sector has faced criticism around corporate governance following the collapse of Carillion in 2018 and Interserve’s fall into administration in March 2019.