Can company boards be improved by worker representation? These experts think so

 
James Nickerson
Follow James
Frances O'Grady said when workers are represented in their boardroom you get higher investment in R&D (Source: Getty)

A board, responsible and accountable for the strategy, culture and performance of a company, would be improved by more worker representation, experts on a panel at the Institute of Directors annual conference have said.

There is plenty of evidence that “shows clearly when workers are represented in their boardroom you get higher investment in research and development, greater efforts taken around the environment and better industrial relations", general secretary of the Trade Union Congress Frances O’Grady said.

Read more: The business case for boardroom diversity

O’Grady was joined by Sir Charlie Mayfield, chairman of John Lewis Partnership, who said that while John Lewis Partnership has an unusual boardroom makeup, “I absolutely agree that having directors from the work force makes a material difference to conversations”. Mayfield Added:

You get a greater balance than would exist otherwise and perspectives that wouldn’t be otherwise brought.

However, Mayfield departed from O’Grady by commenting: “It’s not a panacea, but it does make a difference. It is not impossible but needs to be thought through carefully. If you forced all PLCs to do it, it could be very difficult.”

Read more: Mentoring critical to having more women on boards

Also on the panel was Sir Roger Carr, chairman of BAE Systems, who praised the idea of worker representation on boards.

I’ve chaired companies in Germany that have a different structure where there is a mix of management and people from unions and it’s a cultural norm that works effectively.

You get different perceptions but common objectives. It’s taken a long time in post-war Germany to create that structure. Culturally the UK is not there yet, but what is happening is that the shareholder community is more concerned about the makeup of the board.

Carr wrapped the conversation up, stating that worker representation provides a blend of skills and experience. "But 20 years ago when I joined a board, this wasn’t on anyone’s mind. The further we go towards creating that mix, the better for business."

Related articles