Workers on company boards makes sound economic sense, says TUC
Allowing workers to sit on company boards would not only mean top executives’ pay was set at more reasonable levels, but would also encourage the long-term success of individual firms, as both employees and directors worked together in the best interests of company performance, according to two reports published last Tuesday by the TUC.
The TUC has long argued that corporate governance laws in the UK are missing a trick by preventing worker representatives from sitting on remuneration committees. It also sees an important role for workers on boards as a way for companies to emerge stronger from the economic crisis.
In the two reports – one looking at the European experience and the other setting out the arguments why the UK should set out on a similar path – the TUC argues that the UK’s short-termist approach (based on a model relying solely on shareholders to hold companies to account) has delivered neither economic success nor social justice.