will today attack the
“reckless corporate culture” that he says is damaging Britain’s
economy, as he sets out Labour's plans to require boards of large
companies to reserve at least one third of their seats for
workers.
The plan to give employees a real say in how
companies are run is being announced as part of Labour's push to
expand democracy in Britain's economy and workplaces, as well as
across society.
Under Labour's plans to give workers more
control, employee directors will have to be elected by the entire
workforce, including overseas staff. u-turned on her pledge to put
workers on boards.
The announcement comes as the party is seeking to
use its conference in Liverpool to make a direct pitch to working
class communities which it says have been held back by years of
austerity and neglect.
Pointing to new research by the party showing the
UK has the lowest average business investment of any G7 nation as
a share of GDP, Labour says that current corporate governance
structures, which give legal priority to shareholder interests
over other stakeholders, feeds a short-term corporate culture in
Britain and holds back economic growth.
MP, Leader of the , said:
“Workers are Britain's real wealth creators. They
deserve a seat at the table.
“In workplaces across the country, working hours
have got longer, productivity has nosedived, pay has fallen and
insecurity has risen.
“Businesses have been allowed to get away with
such exploitative practices because the balance of power has
shifted against workers. That has allowed a reckless corporate
culture to fester which is damaging Britain’s
economy.
“Labour will turn the tide and give workers more
control and a real say at work. By ensuring businesses reserve a
third of board seats for workers, we'll help transform our broken
economic model, as part of our plans to rebuild Britain for the
many not the few.”
Ends
Notes to Editors
· Labour will introduce primary legislation mandating that
employee directors comprise at least one third of the board, and
a minimum of two worker directors per board,[9] at all companies,
public and private, with a workforce 250 or more.
· Employee directors must be elected by the entire workforce,
including overseas staff.
· Employee directors would have the same legal duties as other
directors, with the same remuneration.
· Labour will work with the TUC to provide a network and
training for worker directors to help them fulfil their
role.
· Workers on boards is not an alternative to other forms of
worker representation, such as collective bargaining, but rather
part of a package of measures that will strengthen the voice of
employees in the workplace.
· The Government has U-turned on the idea of putting workers
on boards. At the launch of her leadership campaign in July 2016,
said: “If I’m Prime
Minister … we’re going to have not just consumers represented on
company boards, but employees as well … It is not anti-business
to suggest that big business needs to change. Better governance
will help these companies to take better decisions, for their own
long-term benefit and that of the economy overall.”
· This was heavily watered down to giving companies the option
of the following on a “comply or explain” basis: assigning a
non-executive director to represent employees; creating an
employee advisory council; or nominating a director from the
workforce.
· Workers on boards is popular with the public. A poll by
Survation found that 76% of UK employees are in favour of
workforce representatives sitting on company boards of directors,
including 70% of Conservative voters.
· Britain’s reckless corporate culture is contributing to low
investment, low productivity and inequality:
- The
UK has the lowest average corporate sector investment of any G7
nation as a percentage of GDP (over the period 2010-2016).
- Productivity
is way behind that of comparator countries. Output per head is
15.4% below the rest of the G7.
- The
mean pay ratio between FTSE 100 CEOS and the mean pay package of
their employees is 145:1
