Frances O'Grady
General Secretary, Trades Union Congress
Not so long ago, it was taken for granted that most boardrooms would resemble an exclusive gentlemen's club. Those who challenged the status quo were told, without a trace of irony, that board appointments must be made on merit. This despite the fact that, even today, board members are routinely selected with a tap on the shoulder, rather than through an open recruitment process.
While popular with the public, the TUC's call for mandatory representation of workers on boards has met with a similarly confused response in some quarters. Some say it would make no difference, as worker representatives would feel too overawed to make a meaningful contribution. Others say it would shake the very foundations of the corporate governance system. Sometimes our opponents hold both views simultaneously.
A combination of greed and 'group-think' led to the collapse of Lehman Brothers and sparked a crisis across the global financial system. Diversity in the boardroom can help guard against events such as this. Excluding half the human race makes for poorer company decision-making. The same is true for the exclusion of workers, regardless of gender.
Britain is now in a minority of EU countries that fail to make any provision for workers' representation on corporate boards. According to TUC research, 18 EU countries - plus Norway - already practice some form of industrial democracy. Evidence shows that this can help build better companies that are more likely to invest in skills and distribute rewards more fairly. From employment rates to R&D spend - countries with the strongest workers' participation rights reap the greatest rewards.
At a time when most shares in Britain are held overseas and, on average, for just a matter of months, the old fashioned idea that shareholders are the sole stewards of the best interests of a company is defunct. No one has a greater interest in the long-term interests of a company than those whose livelihoods depend on it. Workers on boards serve as a reminder that sustainable wealth is not just created by corporate rock stars but by labour. And worker representatives can contribute much needed common sense and honesty to boardroom deliberations on what to do with this wealth. On issues such as investment, productivity and top pay, the voice of working people needs a fair hearing.
People are increasingly questioning the legitimacy of an economic system run by a tiny, powerful corporate elite that calls all the shots. For trade unions, our values of equality and democracy do not stop at the workplace door. If the great reform of the twentieth century was political enfranchisement, then the twenty-first century must address its economic equivalent.