Theresa May made a clear promise during her leadership campaign and recent speech to Conservative Party Conference to have workers represented on company boards.
The Prime Minister said in October:
"Too often the people who are supposed to hold big business accountable are drawn from the same, narrow social and professional circles as the executive team. A change has got to come. So later this year we will publish our plans to have not just consumers represented on company boards, but workers as well."
However, speaking to business leaders today she now appears to be back-tracking on this commitment:
"I can categorically tell you that this is not about mandating the direct appointment of workers or trade union representatives on Boards."
If this turns out to be the case, it represents a huge missed opportunity to put in place a different model for British business.
In many of Europe's most successful economies, worker representation on company boards is an accepted and valued part of doing business. If introduced in the UK, it could bring significant benefits here too.
Here is why:
Shared interest - Those working on the shop floor have a clear interest in the long-term success of their company. And their direct experience of working with customers and suppliers gives them insights and a perspective that the non-executive directors round the table do not have.
Having workers on boards will help companies plan better for the long term, instead of just prioritising short-term shareholder returns.
Boardroom diversity - It has been widely recognised that having a wide range of voices in the boardroom improves decision-making and avoids the curse of groupthink.
Research shows that other board members value the contribution that workers make within the boardroom. For example, a survey of business leaders in Sweden found that nearly two-thirds (60%) considered the role of worker board representatives to be positive or very positive, with just 7% finding it negative.
And four-fifths (81%) described the co-operation between the worker representatives and other board members as good, compared with just 4% describing it as bad.
Research and development - Countries with strong rights for workers' participation, including workers on company boards, perform better on a whole range of measures, including research and development and employment rates.
Having workers on company boards is not something UK companies should fear.
FirstGroup is a successful FTSE 250 transport company that has had an employee director on its board since the company was created in 1989. The company is positive about its experience:
"The perspectives and input of Employee Directors aids decision making and demonstrates the company's desire to hear from our workforce. It complements the strong and positive relationship we have with trade unions, rather than being a substitute for normal industrial relations.
"Directors and workers alike find Employee Directors invaluable in providing a closer link between the depot and the boardroom."
It is time to open up Britain's boardrooms.
If the Prime Minister wants to govern for ordinary working people, she must not shy away from reforming corporate Britain.Suggest a correction