Government urges CEOs to engage more with employees

CEOs should take employees’ voices more seriously, according to new Government reforms. Having a sense of control at work is a key aspect of workplace wellbeing, so we welcome these moves to give employees more clout in the boardroom.

In summary, the proposed changes to the UK Corporate Governance Code will:

• increase public accountability of premium listed businesses
• extend corporate governance principles to large private companies
• put employee engagement at the heart of the board’s agenda.

At PES, we firmly believe that if CEOs listen to their employees and take action, they’ll create a better employee experience – which is good for business.

How will companies increase employee engagement?

The Financial Reporting Council (FRC), a body which promotes transparency and integrity in business, will be asking companies whether they agree to engage more with employees using one of these mechanisms:

• a designated non-executive director
• a formal employee advisory council, or
• a director from the workforce.

Any of these approaches will give employees a greater voice at boardroom level. If adopted, companies will need to ‘comply or explain’, placing the onus squarely on the board to follow through.

We’ll be discussing in more detail how CEOs and top executives can lead the drive for improved engagement and workplace wellbeing at our CEO seminar on 11 October 2018. Find out more and book your place.

How does employee engagement affect workplace wellbeing?

Employees who feel that the CEO and top team are engaging with them should have a greater sense of control over their work experience.

The Health and Safety Executive (HSE) identifies control as one of the management standards or conditions that help to alleviate workplace stress.

With 12.5 million working days lost to stress, anxiety and depression in 2016/17, anything that lowers stress and increases employee wellbeing is to be welcomed.

Adding social justice to corporate success – for public and private companies

Employee engagement is just one aspect of the proposed corporate governance reforms. According to a House of Commons briefing paper, ‘…companies need to do more to reassure the public that they are being run, not just with an eye to the interests of the board and the shareholders, but with a recognition of their responsibilities to employees, customers, suppliers and wider society.’

The UK Corporate Governance Code is designed to help company directors achieve effective, accountable and sustainable success. These new changes add in the idea of social justice, recognising that some recent headlines (about executive pay, for example) have eroded public trust.

Although the Code applies to public companies with a premium listing, the current reforms will be looking at the governance of large private companies as well.

In fact, its principles are relevant to how all businesses are run, whatever their size. Find out more about our wellbeing approach.

About PES

Delivering a great employee experience is a challenge for growing organisations. At PES, it’s what we do. Our online employee benefits platform, HR support and workplace wellbeing services bring out the best in your employees – enabling your business to thrive.

Call us on 01454 808658, email us at hello@wearepes.co.uk or fill in our enquiry form.