The 2018 UK Corporate Governance Code asks companies to formally create a mechanism for board engagement with employees. The Code recommends adopting one or a combination of the following three methods: appointing a board director from the workforce; establishing a formal workforce advisory panel; designating a workforce engagement non-executive director.
If the board decides not to pursue a minimum of one of these options, it should state what alternative arrangements it has established, alongside an explanation of why it believes them to be effective.
Among the FTSE 150 companies, 47% appointed a designated NED to engage with the workforce, followed by other options (40%) not outlined by the Code, including:
- Integration with management’s employee engagement programmes;
- Virtual meetings with the board and town halls;
- Site visits;
- Employee engagement surveys.
ITV and WPP chose both to designate an NED for workforce engagement and to create an advisory panel.
|Workforce engagement by type
|Designated non-executive director
|Formal workforce advisory panel
|Director appointed from the workforce
|Designated non-executive director and a workforce advisory panel
|Did not disclose
The slim differences between 2021 and 2020 may be attributed to the change in constituents.
Most workforce engagement designated NEDs are women (65%, 53), and 33% (27) are non-UK nationals.
Almost half of the boards in our survey (47%) that have chosen to designate a NED for workforce engagement have also attached an additional fee to the role. This fee averages £13,771, slightly higher than last year’s average of £13,139.