A AIM Company Secretary writes...
“For the companies who have appointed a Designated NED for Workforce Engagement; how does the Director engage with the workforce to ensure compliance with the UK Corporate Governance Code requirements? We have had ad-hoc activities in the past but want a more formal program for 2023. Do you use a formal Terms of Reference for this activity?”
Our NED is responsible for “overseeing” colleague engagement, not for doing it all themselves. Our NEDs participate in Listening Groups, and visit factories and shops, and also once per year attend a meeting with our Unions. We report on stakeholder engagement including with colleagues at each board meeting which is subsequently used as part of the s172 report.
We had an International People Forum made up of representatives from each of our businesses. This met twice a year and tended to focus each time on a particular discussion topic like engagement (perhaps following the results of our annual survey) or D&I. The NED then reported up to the Board on the discussions at the following meeting.
We have an established employee forum which meets quarterly, and following attendance they report back to the Board as a standing agenda item.
Two initial comments: (1) Our designated NED is happy to be active in this regard and spend time on it (2) Our plc board meetings take place at the locations of our operational divisions, so the designated NED (and all directors) are regularly at our businesses. As a consequence of these factors what we do is have “Employee Engagement Sessions” at each division, involving the NED and a cross section of employees (no senior management allowed). This is done according to a formal programme (determined by where and when plc board meetings are held). There’s no formal ToR, we just get on it (although there is a suggested agenda for what these EE Sessions should cover). After each session the NED then reports back to the plc board (verbally) and this is recorded in the board minutes
Some companies do have this in their Terms of Reference. You could consider a programme for the NED to meet staff in small groups, at your business locations. Often Boards like to meet key personnel, high flyers etc over lunch when there is a break from formal business. A survey run by your NED backed with site visits could make up part of a formal programme for the year.