Business secretary says Theresa May stills wants workers represented at governance level, but not necessarily by workers

Theresa May is not back-pedalling on her pledge to give workers a voice on company boards, the business secretary has said in response to criticism of the government’s announcement that it will not force companies to give employees a governance position.

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The government unveiled proposals on Tuesday to tackle corporate excess. May had raised the prospect of placing employee representatives on boards during her Conservative leadership campaign over the summer, but has since told businesses she will not make them do so.

Greg Clark said the prime minister wanted workers to be represented, but not necessarily by having an employee on the board.

“We are not going to make it happen,” he told BBC Radio 4’s Today programme, adding that the government did not want to “overturn what has been a successful system which has had the confidence of business around the world”.

“What we are proposing today is a range of proposals, including 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 influence the renumeration committee.”

Asked if the government was breaking the spirit of May’s promise, Clark said: “I don’t think that’s right – this is a big change in the way that we have conducted corporate governance. We have this legal tradition of having a unitary board, not delegates of groups but function for the whole interests of the company. That has been successful so I would not want to mandate the replacement of something that had been successful.”

The Trades Union Congress urged May to stick to her promise of putting workers on boards. Speaking earlier in the programme, the general secretary, Frances O’Grady, said: “It It is very clear from the poll the TUC is publishing today, that the majority of people want the prime minister to keep her promise to have elected workers on boards. That’s not just because it’s the right thing to do, it is better for business too.

“In countries that have workers on boards, which is the majority in Europe, it shows that they have better investment in R&D, better investment in skills and they tend to take decision that are more about the long term, because of course, workers are champions of the long-term success of a company because their livelihoods depend on it.”

She urged May not to water down the promise by substituting workers on boards with a person who would represent the “voice of workers”.

“Having a glorified suggestion box or giving that responsibility to an existing member of the board does not amount to a genuine voice for workers. The only way you can have a genuine voice for workers is workers elect them.”

She said people were fed up with the behaviour of some boards.



“There has been a degree of snobbery about whether workers can cut it in the board room. It is important that the prime minister, who said on the day of the autumn statement that she made no apologies for the fact that her government is going to deliver on that promise. If she doesn’t then people will question what other promises could be broken.”

Clive Lewis, the shadow business secretary, said May had “rowed back on her flagship policy of putting workers on boards. Sadly, this green paper looks like offering tokenism rather than a much-needed call to action.

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“The real test has to be whether these proposals would have saved jobs and pensions at BHS or prevented the gross mistreatment of staff at Sports Direct, and whether they’ll tackle the scourge of low pay and escalated executive pay. Anything that falls short of doing that is just not good enough.”

Among the proposals for corporate reform could be the idea of publishing pay ratios – the difference between the chief executive’s pay and that of the workforce.

The green paper will have three sections: one on remuneration, one on stakeholder engagement and a third that asks what elements of these should apply to private companies.