Worker directors 'benefit' firms

Mon, Jul 16, 2012, 01:00

A move towards greater privatisation in semi-State companies should not be a reason to overlook the value of having worker directors on their boards, Ceann Comhairle Seán Barrett has said.

Speaking at the publication of a report examining the participation of worker directors in Ireland, Mr Barrett said the notion of workers bringing advice and knowledge from the shop-floor could only be of benefit to the wider company.

Mr Barrett said that banks could have learned from having worker directors on their boards over the last decade as even “dogs on the streets” were saying the way in which they were operating their lending businesses was unsustainable.

“If we had those who were serving behind a counter in a bank, the everyday people, saying this is crazy stuff maybe those at board level would have taken note,” he said.

“Instead of chasing the value on the share in Anglo…maybe we wouldn’t have the situation we have today and the crisis we are in today.”

The report by the independent think-tank Tasc found that the vast majority of ordinary directors in semi-State firms considered worker directors to be loyal to their company, trustworthy and diligent. Their contributions were viewed as being positive and unique, the report states.

The report, which was commissioned by the National Worker Director Group, recommends:

- The practice of appointing worker directors be extended across the public sector
- That mandatory training be given to worker directors in order to improve the workings of the board
- That skills audits be held and independent directors appointed on the basis of skills and experience
- There should be at least 25 per cent work representation on boards to avoid isolation
- Workers be better informed of the role and obligations of the worker director at election time in order to ensure they do not face unrealistic or unreasonable expectations.

The lead researcher on the report, Dr Aoife Ní Lochlainn, said that more than half of the respondents, nine worker-directors and 13 non worker-directors, to a survey conducted during the study considered a contrary voice to be important as it helped to avoid group thinking and promoted a diversity of opinion.

Dr Ní Lochlainn said that most worker directors did not feel they were treated differently to regular directors but that their exclusion from audit and remuneration committees, largely to avoid potential conflicts of interest, remained a “thorny issue”.

The practice of placing worker directors on the boards of semi-State companies in Ireland was brought forward by the then minister for labour Michael O’Leary in 1977.

He believed the proposal would improve participative systems and make better use of worker’s knowledge and ideas in company decision making. The Worker Participation Act 1977-78 (which allows for worker directors nominated by trade unions or elected by employees) is confined to State owned enterprises.

Dublin Airport Authority, An Post, the ESB, RTÉ, the National Disability Authority and Dublin Port Company are among the semi-State firms and State agencies where worker directors assume roles on company boards.