While the prime minister has ruled out electing workers or trade union representatives on executive boards, one of the areas the corporate governance green paper launched in December last year focuses on is giving a greater voice to employees and consumers in the boardroom. Therefore, employee engagement in general is something that many companies are likely to consider (if they’re not already) going forward.
As a mutual company MyCSP has 25% employee shareholding and as part of our shareholders' agreement we have a duty to have employee representation. While ours is mandatory, it’s not a requirement for companies with employee shareholding. Regardless of this I believe there are very important lessons from employee engagement that apply to all companies.
MyCSP elected the first Employee Partnership Council (EPC) nine months before the company was established in 2012. This was a deliberate strategy to ensure that they could participate in the most important decisions we’ve had to make, including choosing a private sector investor and partner and on the decision to invest.
Since then we’ve had five elections and over the five years a range of frontline employees and team leaders have been part of the council, with directors of the trust company being drawn from senior and middle managers as well as frontline employees.
So what are some of the key considerations of employee engagement in a co-owned business? Here are some things we have learned:
- First of all, in order for employee engagement 'to work’ it must be recognised as important by all staff, not just the elected few. Make sure you get the induction right for all new staff – set out how things are done, including the company culture and structure as well as the importance of the employee voice, right from the outset. Secondly, be clear about the responsibilities of employee engagement as well as the benefits.
- Key to employee engagement is having a credible employee voice. Elect your EPC and support their engagement with employees across the business.
- Continuing to invest in your EPC is essential. Ensure that employee members have the tools and capability to represent their colleagues from grass roots to the boardroom. Include skills training as well as practical knowledge, such as how to read the company accounts.
- Creating a culture of transparency and sharing information with employees is also key but ensure they understand how this relates to them. Test the temperature through frequent surveys to complement informal engagement and other forms of direct employee participation.
- Ensuring buy-in from your senior team and managers throughout the business is also very important. It could be uncomfortable if employees know more than managers, so don’t allow middle or junior managers to torpedo engagement activity; help them to own it too with local buzz meetings and regular huddles.
- Learn to trust your people. Your staff are your most valuable asset and research has shown that organisations where employees have a stake in the business often out perform their rivals.
- Differentiate between your shareholder EPC and your trade union if you have one.
At MyCSP we have learned along the way, adapting and changing as necessary.
Having employee partners in the boardroom may no longer be part of government policy, but companies should nonetheless consider it. Having a direct voice from the shop floor at the top table can have a real impact. This can also be built on by having employee representation on all key decision-making bodies.
Sharon Crosland is mutual guardian at MyCSP