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When Workers Become Board Members

By: Chris Hogan MSc - Updated: 4 Sep 2012 | comments*Discuss
 
Workers Business Board Workers' Rights

Ideas about the place of workers in the running of businesses first came about in the UK during the Industrial Revolution, as conditions in the quickly built slum towns surrounding most centres of industry were pared to the bone. This lead to philanthropists and thinkers, such as Robert Owen and Karl Marx, developing ideas around worker collaboration and control of enterprises.

Emergence of Early Concepts

Socialism and Communism both gave rise to antagonistic views of worker control, with the workers replacing the owners of businesses, by force if necessary, whereas the ideas of compensation and collaborating with workers, giving them a share in the profits, led eventually to the founding of the Co-operative Movement in the United Kingdom.

The concept of workers sharing board seats and decision-making in a capitalist context was an anathema to Communists, who could not stomach any such collaboration between workers and bosses. But the idea took hold in post-war Germany during the rebuilding of the country, particularly in the coal and steel industries, where it is known as Mitbestimmung, meaning 'to have a voice in'.

Coal Industry Comparisons

This collaboration proved its worth when the coal industry was declining and 400,000 workers lost their jobs between the late 1950s and the early 1970s. With close consultation on retraining options, redundancy and early retirement packages, the industry was consolidated with very little in the way of unrest from the workforce.

Although this was viewed with suspicion by Socialist and Communist groups in Europe, it contrasts starkly with the combative way that the same process was achieved in the 1980s in the UK. The financial cost to the taxpayer was huge, as coal was importing in vast quantities to avoid power strikes, and incalculable damage was done to civil liberties and mining communities.

European Consolidation

The national attitude in the 1970s in the UK was considered too immature to accept a consultative approach, as even the unions didn’t believe it possible. One trade union magazine in the early 1970s said: "There is an irreconcilable gulf between the interests of those who seek to maximize profits and those who protect the interests of workers."

Closer European ties, with the UK joining the Common Market in 1973, meant that attitudes would have to change, albeit slowly. One of the three pillars of the European Union, as it is known today, is the harmonising of economic, environmental and social policies, the last of those including workers' rights.

United Kingdom Takes Steps

As a result, the Transnational Information and Consultation of Employees Regulations 1999, introduced in the UK in 2000, made it necessary for companies with a presence in more than one EU member state to set up a European Works Council or other informative and consultative procedure to disseminate information from the board to workers and vice versa. Anecdotal evidence suggests that most companies have gone down the route of a procedure rather than a council.

This was the first step in the UK toward harmonising workers' representation rules across Europe, which should eventually see workers on boards. In fact, in September 2006, the first ever British worker was appointed to a company board when the Allianz global insurance and finance giant, owners of Cornhill Insurance and Petplan among many other service in the UK, changed from being a German-based organisation to a European one, operating under European Union law.

Trailblazer

This meant that they had to adopt the representation rules of the EU, which will eventually trickle down to the UK. Geoff Hayward, an Amicus union member, will have the right to be informed and consulted on issues such as the increasing outsourcing of union members jobs to developing countries and the effects on staff of cross-border restructuring. Assuming the UK retains EU membership and continues to take part in the harmonising process, one day all companies in the UK will be run this way.

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I was interested to read this bit of history of workers becoming co opted to board members. I worked for nationalised company once and they often took on retired workers as honorary board members. It made sure that someone at least new the working practices and the workers point of view. Not sure if that happens anymore.
Interested - 21-May-12 @ 6:42 PM
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