Designated NEDs: The journey from scepticism to meaningful insights
The 2018 UK Corporate Governance Code introduced greater emphasis on how boards consider and engage with their workforce. This arose from several political and societal impetuses to empower employees, strengthen their voice in the boardroom and bring directors closer to the realities of those on the ground.
This report by EY provides Boards, company secretaries and others involved in this space with practical thoughts on how to approach workforce engagement in the future.
Key findings include:
Companies have made a good start with DNEDs enthusiastically taking up the mantel. While the first year has been a lot about taking stock and learning, DNEDs feel they have been able to have some impact and deliver.
Many companies already had many mechanisms in place to engage with their employees. DNEDs have supplemented these — the main change has been to ensure that workforce feedback gets appropriate attention at the board level.
Where there is a significant proportion of staff under varying working arrangements (e.g., contractors), DNEDs may need to evolve and expand their engagement to cover the wider workforce, not just employees.
Data ought to play a role in helping to target the focus of the DNED’s activities.
Both the role and the mechanisms are still bedding in. It will likely take time to build trust from the initial scepticism and, alongside this, for the feedback to be of a calibre that will meaningfully influence board decision making.