Employees on boards? We’re already on it.

In the immediate aftermath of the prime minister’s brave call for more ‘employees on boards’ I was saddened, but not altogether surprised, by some of the immediate defiance to the idea.

For businesses in the Employee Ownership Association (EOA) membership, the response has, unsurprisingly, been far more positive.  It reinforces what many of them know – that having employees engaged at every level of business operation is a hugely positive thing to do.

As revealed in a recent survey of employee owned businesses, conducted by the brilliant Professors Andrew Pendleton and Andrew Robinson, 45% of respondent employee owned businesses already has 1 or more employee directors on the main board.  And that in all cases employee directors are either elected directly by the workforce, or by an employee council which is in turn elected by the workforce.

So it seems our sector is ahead of the curve. Employee owned businesses have long been aware of the positive impact on businesses who commit to engage and empower employees in a meaningful dialogue. It seems to me those keen to dismiss the idea instead focused immediately on form and not function.  Their reaction was to focus on how this would not work – as opposed to celebrating the idea and considering how might it be implemented.

But it is true, that providing a structure which places employees on boards cannot be undertaken lightly – and does require a ‘wrap round’ approach of not just board representation, but comprehensive employee engagement, ideally supported by shared ownership.

Employee owned businesses are not so different to the business cited by opponents to the prime minister’s ideas; they are managed professionally, mostly for profit, although some are NFP, are operating in competitive markets and are challenged to innovate and grow.  But guess what?  They manage this whilst at the same time being more inclusive in how they are governed, more responsible in how they behave and are very often more productive and profitable too.

There can be no doubt that the way we do business has to change.  Employees and the public are no longer prepared to quietly accept the excesses of senior executive pay, or the poor corporate behaviours that have brought ‘business’ into the limelight for all the wrong reasons. The challenge to do not only what is legal, but also what is right is constant and there is now a collective outcry for a better form of business.

For businesses that don’t already have some meaningful level of employee ownership as part of their ownership structure, the challenge of implementing the processes to support employees on boards may well be more challenging – but still worth doing.

The EOA is keen to share the learning from its members with others and therefore this week I will be writing to the Secretary of State to offer our help and support in realising the prime minister’s ambitions  to engage employees in greater representation in the businesses in which they work.