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Workers on boards was an enlightened idea - Theresa May should have stuck to it

The government has backed away from taking a bold, but sensible, step.

On becoming Prime Minister, Theresa May promised on the steps of Downing Street to govern in the interests of the many and not the few.

She pledged to put workers on company boards, acknowledging that because non-executive directors are “drawn from the same narrow social and professional circles as the executive team”, the scrutiny they offer is “just not good enough”. Fine words and good intentions, which were welcomed by the TUC.

Unfortunately, with the government’s new proposals for corporate governance reform, published today, May has missed an opportunity to put her words into practice.

Instead of introducing workers on boards, as promised, businesses will be allowed to choose from a menu of options to "engage the workforce" – none of which are up to the job.

The scandals at Sports Direct and BHS show why we need urgent and far-reaching change to boardroom culture and priorities.

Workers on company boards would raise the quality of corporate decision-making, bringing the experience of ordinary workers to bear on boardroom discussions. Evidence from other countries suggests that other board members will particularly value this insight.

Worker directors would also boost diversity in the boardroom, helping to challenge "groupthink".

What’s more, workers have a clear interest in the long-term success of their company, unlike many shareholders who can – and do – simply sell their shares when things go wrong. So their participation would encourage boards to take a long-term approach to company success.

It would also, quite simply, be the right thing to do. Workers are affected more than any other group by company decisions and deserve a say in how they’re made.

Not a veto, but a voice.

Having worker directors is the norm across most of Europe, and is associated with higher levels of research and development and employment, and lower levels of inequality and poverty. Closer to home, FirstGroup has had an employee director since its inception and describes the role as ‘extremely beneficial’.

So it’s deeply disappointing that the government has backed away from taking the bold, but sensible, step that UK plc – and its workforce and wider society – so badly need. And the alternatives the green paper does propose are deeply inadequate.

First, companies will be able to designate an existing non-executive director to "represent" the workforce on the board. This is a deeply patronising proposal which, in practice, simply allows companies to continue with the status quo.

Alternatively, companies can introduce an employee advisory council. But no guidance is given on how the council should be constituted or how members should be selected. And as it will sit below the board, it will have neither teeth nor direct boardroom voice.

Finally, companies can introduce a director from the workforce. This is the only option that’s been tried successfully elsewhere and in which the TUC has confidence. But the proposal is for just one worker director and there’s no provision for this person to be elected by the workforce, rather than simply appointed by management.

This is nowhere near what the Prime Minister promised.

Worse still, these proposals are being introduced by amending the Corporate Governance Code, enforced on a "comply or explain" basis. So companies will be able to do precisely nothing – so long as they explain this in their annual report.

One small saving grace in the government’s proposals today is the requirement for companies to report on pay ratios, using CEO total pay and average total workforce pay.

That will go a short way to improving transparency, and could place some pressure on directors to consider whether soaring executive pay packages can really be justified. The devil will be in the detail, but the provision that total CEO pay – rather than salary alone – should be used is welcome.

Workers on boards is an idea whose time has come. So at the TUC, we’ll continue to work to ensure that today’s proposals are not the last word on this common sense proposal.

Janet Williamson is the TUC senior policy officer for corporate governance. For more information, read the TUC report All Aboard: making worker representation on company boards a reality.

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Barb Jungr’s diary: Apart-hotels, scattered families and bringing the Liver Birds back to Liverpool

My Liver Birds reboot, set in the present day with new music and a new story, is coming to life at the Royal Court Theatre.

For the last three years I’ve been writing a musical. Based on Carla Lane and Myra Taylor’s Liver Birds characters Beryl and Sandra, but set in the present day with new music and a new story, it is coming to life at the Royal Court Theatre – in Liverpool, appropriately. Amazingly, the sun shines as the train ambles into Lime Street, where Ken Dodd’s statue has recently been customised with a feather duster tickling stick and some garlands of orange and lime green. Outside the station, composer Mike Lindup and I buy a Big Issue. We have a scene opening Act Two with a Big Issue seller and we are superstitious. We check into our “apart-hotel”. Apart-hotel is a new word and means a hotel room with a kitchen area you will never, ever use.

At the theatre everyone hugs as though their lives depend on it; we are all aware we are heading into a battle the outcome of which is unknown. There will be no more hugging after this point till opening night as stress levels increase day by day. I buy chocolate on the way back as there’s a fridge in my apart-hotel and I ought to use it for something.

Ships in the night

There’s no point in being in Liverpool without running by the river, so I leap up (in geriatric fashion) and head out into the rain. You’d think, since I grew up in the north-west and cannot ever remember experiencing any period of consecutive sunny days here, that I’d have brought a waterproof jacket with me. I didn’t. It springs from optimism. Misplaced in this case, as it happens. I return soaking but with a coconut latte. Every cloud.

We have been in the theatre for seven hours. Everything has been delayed. The cast are amusing themselves by singing old television themes. They have just made short shrift of Bonanza and have moved on to The Magic Roundabout. We may all be going very slightly mad.

As hours dwindle away with nothing being achieved, Mike and I pop to the theatre next door to enjoy someone else’s musical. In this case, Sting’s. It’s wonderfully palate-cleansing and I finally manage to go to sleep with different ear worms about ships and men, rather than our own, about Liverpool and women.

Wood for the trees

This morning “tech” begins (during which every single move of the cast and set, plus lighting, costume, prop and sound cues must be decided and logged on a computer). Problems loom around every piece of scenery. Our smiles and patience wear thin.

By the end of the 12-hour session we know we have the most patient, professional cast in the known cosmos. I, on the other hand, am a lost cause. I fret and eat, nervously, doubting every decision, every line, every lyric. Wondering how easy it would be to start over, in forestry perhaps? There is a drug deal going on across the road in the street outside the hotel. My apart-hotel kitchen remains as new.

First preview

I slept like a log. (All those years of working with Julian Clary make it impossible not to add, “I woke up in the fireplace”.) At the crack of dawn we’re cutting scenes in the Royal Court café like hairdressers on coke. Today is ladies’ day at Aintree, which feels apropos; tonight we open Liver Birds Flying Home, here.

The spirit of Carla Lane, who died in 2016, always dances around our consciousness when we are writing. She was very good to us when we began this project, and she was incredibly important to my teenage self, gazing out for role models across the cobblestones.

I grew up in Rochdale, a first-generation Brit. My parents had come here after the war, and what family we had was scattered to the four winds, some lost for ever and some found much later on, after the Velvet Revolution. I had a coterie of non-related “aunties” who felt sorry for us. Ladies with blue rinses, wearing mothball-smelling fur coats in cold houses with Our Lady of Fátima statues lit by votive candles in every conceivable alcove. To this day, the smell of incense brings it all back. Yet the northern matriarchy is a tough breed and I’m happy to carry some of that legacy with pride.

Seeing the theatre fill with people is terrifying and exciting in equal measure. We’ve had to accept that the finale isn’t in tonight’s show because of lack of technical time. I’m far from thrilled. The show, however, has a life of its own and the actors surf every change with aplomb. The audience cheers, even without the finale. Nonetheless, I slouch home in despair. Is it too late to change my name?

Matinee day

The fire alarm is going off. I know that because I’m awake and it’s 4am. As I stand in reception among the pyjama-clad flotsam and jetsam of the apart-hotel, I suspect I’m not the only one thinking: if only they’d had alarms this annoyingly loud in Grenfell. I don’t go back to sleep. I rewrite the last scene and discuss remaining changes for the morning production meeting with my co-writer, George.

The Saturday afternoon performance (which now includes the finale) receives a standing ovation in the circle. The ratio of women to men in the audience is roughly five to one. In the evening performance it is 50/50, so I’m curious to see how Beryl and Sandra’s story plays to the chaps who’ve been dragged out on a Saturday night with their wives. In the pub after the show a man tells Lesley, the actress playing present-day Beryl, how moved he had been by what he’d seen and heard.

A few years ago I stood behind Miriam Margolyes as we were about to go on stage at the Royal Festival Hall in a Christmas show. She turned to me, saying, “Why do we do this to ourselves?” We agreed: “Because we can’t do anything else!” I suspect forestry is out of the question at this juncture. 

“Liver Birds Flying Home” is at the Royal Court, Liverpool, until 12 May.

Barb Jungr is an English singer, songwriter, composer and writer.

This article first appeared in the 18 April 2018 issue of the New Statesman, Enoch Powell’s revenge