The UK’s Financial Reporting Council (FRC) published Monday research by Royal Holloway, University of London, and the Involvement and Participation Association that offers guidance to companies on improving workforce engagement.
Workforce Engagement and the UK Corporate Governance Code: A Review of Company Reporting and Practice aims “to provide a deeper understanding of the current intersection of corporate governance with employee voice”. The requirements in The UK Corporate Governance Code for boards to ensure effective workforce engagement provided the research context.
Lessons for companies from the research include:
- Workforce representativeness and breadth of coverage. It is important to ensure that the employee voice reflects the geography and demography of the workforce.
- Depth of coverage. The FRC said it is crucial to properly integrate different engagement and voice channels with each other, including collective forms of employee representation.
- Regular input. Regular and structured input from the workforce, especially during periods of rapid change, should be provided.
- Workforce representatives. Whether sitting on a panel or as worker directors, representatives should be chosen with some input from the workforce.
- Substance rather than process. Energies should be focused principally on the substance of workforce engagement, not the process.
- Agenda setting. This is best when there is a balance between topics of management interest and topics of workforce interest.
- Effective feedback loop. A meaningful dialogue with the workforce also requires an effective feedback loop, based on an informed employee voice.
The FRC’s CEO, Sir Jon Thompson, said: “The report highlights some good examples of productive workforce engagement. It takes time to put in place, and develop, workforce engagement mechanisms, create a feedback loop, and see the consequent results.
“Ultimately, the main goal is a better-performing company. I hope companies and boards will consider this research and engage with the good practice examples.”
The research involved analysis of company reports, a survey of FTSE 350 firms, and a series of interviews with directors, executives, and workforce representatives.
— Oliver Rowe (Oliver.Rowe@aicpa-cima.com) is an FM magazine senior editor.