CIPD: increase emotional intelligence on boards by including HR

The CIPD is urging business leaders to ensure HR leaders are involved in key decision making, in the wake of a report revealing that few people leaders at FTSE 350 firms are on the board.

The report has been launched as parliament launches a new inquiry into sexism and misogyny in the City of London.

The CIPD said there was sometimes a dearth of emotional intelligence in the boardroom and recommended board-level HR representation to ensure there was the people expertise to develop positive corporate cultures and manage workforce risks such as sexual harassment.

Titled the Value of People Expertise on Corporate Boards, the report found just a quarter (25%) of FTSE 350 firms have a board member (both executive and non-executive) with an HR background, while only 2% have an HR director as an executive board member.

It was released just as the Treasury Committee launched an inquiry into sexism in the City, exploring what role firms, the government and regulators should play in tackling sexual harassment and misogyny.

A “people insight deficit” was identified by the CIPD study at board level in many firms, where chairs and senior independent directors tended to have financial rather than HR backgrounds. There was also a lack of HR representation on remuneration committees (23%) and nomination committees (20%), despite these both being focused on the key people issues of reward and talent.

This lack of HR representation undermines firms’ corporate governance, particularly given most questions on board effectiveness from the Financial Reporting Council concern people issues, said the CIPD study.

Common problems or knowledge gaps among non-HR board members included an “overenthusiasm around employee engagement, leading to interference with management ” and “a lack of awareness and discomfort around EDI issues”.

A deficit of emotional intelligence was among the knowledge gaps.

Susannah Haan, senior corporate governance adviser at the CIPD, the professional body for HR and people development, said: “It’s often said that people are a company’s greatest asset, but the make-up of boards simply doesn’t reflect this at the moment. Effective boards require a diverse range of skills and perspectives, so it’s concerning to see how few boards have people with HR expertise. This lack of people insight can lead boards to overlook people risks and thus to significant reputational damage.

“It’s essential that UK boards ensure they have the right mix of expertise to successfully navigate the challenges and opportunities facing organisations, particularly with growing expectations for competence around people issues.”

The CIPD is calling for the Financial Reporting Council to consider refinements to the UK Corporate Governance Code and accompanying guidance. It stated that boards should be made up of professionals with a variety of expertise and should reflect the growing need for greater input, support and advice from senior-level HR practitioners on critical workforce issues.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

Email(Required)

OptOut

From time to time, we will send you emails about selected products, events and services from Personnel Today and OHW+ - but you can choose to opt-out at any time. If you do not wish to receive these emails, please tick this box.

Name

This field is for validation purposes and should be left unchanged.

Δ

Harriett Baldwin MP, chair of the Treasury Committee, said the inquiry into sexism in the City would be investigating whether enough work had been done to “build more supportive workplace cultures, how harassment and misogyny can be addressed, and the role the government and regulator should play in role modelling behaviours”.

Latest HR job opportunities on Personnel Today

Browse more human resources jobs