Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
    • OHW Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
    • OHW Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

Workplace cultureLatest NewsEmployee communicationsCorporate governanceInformation & consultation

FTSE 350 companies ‘could do better’ on employee voice

by Jo Faragher 25 May 2021
by Jo Faragher 25 May 2021

Many major companies treat their corporate governance responsibilities on workforce representation as a “tick-box exercise” according to a review of current practices by the Involvement and Participation Association.

The IPA undertook a comprehensive review of the approaches of FTSE 350 companies to the UK corporate governance code’s requirement for firms to have some form of employee input at board level.

Corporate governance

Corporate governance

Employee motivation and engagement: effective communication 

According to the code, companies are required to either appoint a director to the board from the workforce, have in place a formal workplace advisory panel or have a designated non-executive director (NED) for workforce engagement.

Workforce representation gained prominence in UK boardrooms in 2016 when incoming prime minister Theresa May vowed to put work representatives on the boards of major companies.

While this did not become legislation, a revised UK corporate governance code in 2018 placed greater emphasis on boards engaging with the workforce and to include employees’ views and concerns in key decisions.

According to Patrick Briône, head of research at the IPA, the approach taken by most FTSE 350 companies was to appoint a designated NED to represent workers’ views. Forty percent of companies chose this route, while 12% established an advisory panel and 16% a combination of NED and panel.

However, in many cases it was “unclear why they were chosen; many had little prior experience of workforce engagement”. Likewise, the ways in which the NED interacted with the workforce varied hugely, with many relying on information from staff surveys or brief site visits.

“We did find them to be disconnected from the main body of staff engagement,” said Briône, “with sometimes the NED off doing one thing and HR doing another. This is definitely an area for potential improvement.”

The next most popular approach was to appoint an advisory panel and again there was a mix of formal and informal interactions between the workforce and the board.

“Some were elected, some appointed by managers, some were tiered depending on country, some had union representatives and some not,” Briône added.

The 2021 People & Purpose Award

The Personnel Today Awards now include a category focusing on social responsibility and HR

Around a third of firms used “alternative arrangements” to fulfil the requirements of the code, which ranged from partnerships with trade unions to listening sessions with employees. The IPA described many of these approaches as “scattergun” rather than adding to a coherent whole.

Only five companies of those surveyed had a worker director on the board, and only one had introduced this in response to changes in corporate governance guidance.

When asked why companies had chosen not to appoint a worker director, employers’ reservations included concerns that they would not be able to handle directorship responsibilities, that they would be distrusted by the workforce for being too close to management, and that they would not be able to handle confidential information. There was also a worry they would not represent the diversity of the workforce.

“In practice, however, these concerns were not borne out by our research,” said Briône. “Companies with worker directors handled these well and maybe this is an area where firms could put their fears aside.”

Having a workforce director was considered the most effective approach to ensuring employees have a voice in board-level decision making.

The research found that in the vast majority of cases, decisions on approaches to workforce engagement were made without consultation with the workforce.

No voice in employee voice

A further concern raised by IPA’s research was the lack of consultation with workers on how their voice should be represented. The research found that in the vast majority of cases, decisions on approaches to workforce engagement were made without consultation with the workforce. “This is strange as how to gain a better voice is a workforce governance issue,” Briône explained. “How can they do this if they’re not given a voice on what voice mechanisms they can have?”

The IPA offered a number of recommendations to improve levels of workforce engagement and voice in UK companies. These included:

  • Improving the breadth of coverage to ensure employee voice reflects the geography and demography of workforce, and to ensure minority groups are not underrepresented
  • Integrating different voice channels, such as trade unions, NEDs, advisory panels and staff surveys
  • Frequency is important in terms of getting regular input from the workforce, particularly during challenging circumstances
  • Choose representatives with input from the workforce
  • Don’t develop a process to tick a box – use workforce representatives as a way to embed voices of workers in boardroom deliberations
  • Make sure there is a balance of management interest and workforce interest in the topics discussed, and
  • Conduct regular dialogue, so that employees see the results of their input fed back to them.

One of the challenges of measuring workforce representation and effectiveness is that many annual reports lack detailed information on it, said Chris Rees, professor of employment relations at Royal Holloway, University of London.

“It’s not clear how much thought is given to the effectiveness of the method chosen. The last review of company reporting highlighted a tendency for formulaic statements and vague information, and our findings reiterate this.

“Do the code requirements do enough to ensure the spread of good practice, or is a more robust regulatory framework required?”

The IPA is a consulting and training organisation specialising in employee engagement and participation, led by Nita Clarke, who was co-chair of the government-commissioned Engaging for Success review in 2009.

Employee relations opportunities on Personnel Today

Browse more Employee Relations jobs

Jo Faragher
Jo Faragher

Jo Faragher has been an employment and business journalist for 20 years. She regularly contributes to Personnel Today and writes features for a number of national business and membership magazines. She won the Willis Towers Watson HR journalist of the year award in 2015 and has been highly commended twice.

previous post
Hinkley Point C to create 1,700 more jobs
next post
Tax compliance: it’s vital to audit your resource supply chain

Leave a Comment Cancel Reply

Save my name, email, and website in this browser for the next time I comment.

You may also like

Don’t be gloomy over social mobility in the...

24 Jun 2022

Christian awarded £22k following dismissal over religious necklace

24 Jun 2022

Movers and shakers June 2022: Lloyds, Indeed, Zoom...

24 Jun 2022

Gender pensions gap: women’s retirement pot less than...

24 Jun 2022

White-hot recruitment market? William Tincup talks to Oven-Ready...

24 Jun 2022

British Airways employees at Heathrow vote for walkouts

24 Jun 2022

Young people need more guidance over ‘green jobs’

24 Jun 2022

Government to repeal agency workers ban during strikes

23 Jun 2022

Long Covid: what tribunal’s disability ruling means for...

23 Jun 2022

Brexit remains an ‘open wound’ for EU employees...

23 Jun 2022
  • NSPCC revamps its learning strategy with child wellbeing at its heart PROMOTED | The NSPCC’s mission is to prevent abuse and neglect...Read more
  • Diversity versus inclusion: Why the difference matters PROMOTED | It’s possible for an environment to be diverse, but not inclusive...Read more
  • Five steps for organisations across the globe to become more skills-driven PROMOTED | The shift in the world of work has been felt across the globe...Read more
  • The future of workforce development PROMOTED | Northumbria University and partners share insight...Read more
  • Strathclyde Business School expands its Degree Apprenticeship offer in England PROMOTED | The University of Strathclyde is expanding its programmes...Read more
  • The Search for Talent: Six Major Employer Pitfalls PROMOTED | The Great Resignation continues unabated...Read more
  • Navigating the widening “Skills Confidence Gap” in 2022, and beyond PROMOTED | Cornerstone OnDemand conducted a global study...Read more
  • Apprenticeships are the solution to your recruitment problems PROMOTED | Apprenticeships have the pulling power...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2022

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2022 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
    • OHW Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+