The fact that the latest changes to the UK’s Financial Reporting Council Standards Code includes one on Employee Engagement shows that EE is now firmly on the leadership agenda. That’s something I’ve been campaigning for since we set up the EE Awards so it’s a big step forward.
The blog by Dr. Douglas Board, Senior visiting fellow, Cass Business School and Head of Coachmatch Career Management, explains this better than I ever could, so I’ve copied it below in its entirety.
It’s a good read. Like Douglas, I hope every business uses the Code to embrace employee engagement at the highest levels and then showcase great work at the 2019 EE Awards
UK BOARDS REQUIRED TO STEP UP TO THE CHALLENGE OF EMPLOYEE ENGAGEMENT
Recently the UK’s Financial Reporting Council published a new edition of the standards which boards of directors of UK companies are expected to meet, or to give reasons in their annual report why they have not done so. Not only is employee engagement given a much higher board profile – it is the first change highlighted in the FRC’s press release – but all the other highlighted changes (more attention to culture, diversity and the relationship between top pay and workforce pay) form part of a larger whole running throughout the Code.
The new, shorter Code comprises 18 Principles and 41 supporting Provisions. New Provision 5 states that the board must describe how they have engaged with all the company’s key stakeholders, and kept the effectiveness of their engagement mechanisms under review, but in addition:
“For engagement with the workforce, one or a combination of the following methods should be used:
- a director appointed by the workforce;
- a formal workforce advisory panel;
- a designated non-executive director.
“If the board has not chosen one or more of these methods, it should explain what alternative arrangements are in place and why it considers that they are effective.”
The new Code applies to all companies with a premium listing on the London Stock Exchange in respect of accounting periods beginning on or after 1 January 2019. Supporting examples of good practice and signs of possible problems in organisational culture are detailed on pages 6-7 of the supporting guidance. Rather than a compliance mindset, the guidance stresses: “The workforce will be a vital source of insight into the culture of the company” (paragraph 23).
Where UK businesses may be lagging behind in grasping the opportunities which high-quality employee engagement offers, the new Code provides an excellent opportunity for employee engagement champions and professional advisers to get the attention of boards at a strategic level. And where UK companies are setting the pace in employee engagement, 2019 offers a perfect opportunity to invite a member of the board to be part of the company’s representation at the EE Awards – and to include success in the company’s annual report.