Business secretary Greg Clark said Britain wants to strengthen the voice of workers on company boards, but defended plans not to completely overhaul the unitary board system.
"We're not going to make it happen," he said of the idea of bringing employee representative onto the board, though he said it was an available option to firms.
"What we do want to do is to strengthen, to give a stronger voice to workers on boards," Clark added.
"It's important to have a number of different groups including employees represented on company boards," he said on BBC Radio 4 Today. "This is a big change, a big step forward in the way that we have conducted our corporate governance."
When asked if workers belong on company boards, Clark referred to Theresa May, and said:
"It's important to have a number of different groups, including employees represented on company boards. What we are proposing today is a range of doing that, for example having a non-executive director who has an explicit obligation to engage with the workforce, to report into the board, to chair a stakeholder panel and to influence the remuneration committee."
Last week it emerged that May was dropping the mandatory workers on boards plan, telling the CBI that while the voices of workers should be represented, "this is not about mandating works councils, or the direct appointment of workers or trade union representatives on boards".
"We do have this legal tradition of having a unitary board, the directors that are appointed are not delegates of particular groups, but function for the whole interests of the company, and that's been successful," Clark said. "I wouldn't want to mandate the replacement of something that's been successful."
The government is launching its overhaul of executive pay, with Theresa May pressing ahead with plans to bring salaries in line with corporate performance.
When asked if he wanted chief executives to be paid less, the business secretary said: "I want them to be paid in line with performance." He said a concern had been that pay hadn't just increased at the top of organisations but it has "substantially outpaced the performance of the underlying shares".