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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.
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