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May 'broken promise' over workers on company boards, say unions

Published 21/11/2016

TUC head Frances O'Grady has hit out at the PM over the role of workers in business boardrooms
TUC head Frances O'Grady has hit out at the PM over the role of workers in business boardrooms

The Prime Minister has been attacked for "watering down" a pledge to allow workers to have a representative on company boards.

Theresa May had told the Conservative Party conference in October that employees would join directors in boardrooms to be given a say on how business operate.

But in a keynote speech to business leaders she said there would be no direct appointment of workers or trade unions to boards, telling the CBI there was "nothing anti-business" in her plans.

Tim Roache, general secretary of the GMB, said the Prime Minister had broken her promise, adding: "The Tories can claim to be the party of workers all they want, but actions speak louder than warm words.

"That the Prime Minister stood in front of big business today and watered down a pledge made just a few months ago shows us all we need to know.

"The mask is slipping - nice speeches followed by broken promises will not help working people get fairness and dignity in the workplace."

TUC general secretary Frances O'Grady said: "Theresa May made a clear promise to have workers represented on company boards. The proposals in her speech do not deliver on this.

"This is not the way to show that you want to govern for ordinary working people."

CBI director general Carolyn Fairbairn said: "UK corporate governance is admired across the world. Our businesses know that brilliant employee engagement, openness with customers and support for local communities are essential to success.

"But firms recognise public concerns. The challenge now is to take the great practice that we see in so many places and apply it everywhere, eradicating the unacceptable transgressions that some companies do make.

"On employee engagement, different approaches will work for different businesses but a starting point is firms being able to outline and explain what approach they are taking - whether that's employees on boards, employee committees, dedicated representatives, or other models that genuinely address the issue."

Simon Walker, director general of the Institute of Directors (IoD), said: "IoD members will be significantly reassured by this speech, not least the Prime Minister's positive comments on the importance of innovators and entrepreneurs to society.

"Her administration has also been more consultative than its predecessor, and the IoD welcomes this new approach. Theresa May's proposals on employee representation in boardrooms, for example, shows she is plotting a pragmatic course."

Mathew Lawrence of the IPPR think tank said: "Any decision to row back on workers on boards would be a step in the wrong direction. Worker representation on boards isn't a radical move.

"Among our more productive, investment-rich European competitors it is commonplace.

"The aim of corporate governance reform, after all, must be to address the UK's core economic weaknesses on productivity, investment and fair growth."

Stefan Stern, of the High Pay Centre think tank, said: "The voice of employees is what has been missing from the board level discussion on executive pay over the past two decades.

"That lack of voice has led us to where we are today, where almost everyone agrees that top pay has become absurdly excessive.

"It would be a great pity were the Government to surrender to the inertia that has prevented substantial progress on excessive pay during that time, and snatch ignominious defeat from the jaws of something close to a worthwhile victory."

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