UK: LAPFF survey of workforce engagement methods under the UK Corporate Governance Code

The new edition of the UK Corporate Governance Code, published last year, contains a new provision on board engagement with the company's workforce and states that at least one of the following methods should be adopted: (a) the appointment of a director from the workforce; (b) the creation of a formal workforce advisory panel; (c) designating a non-executive director with specific responsibility for engagement. Under the comply or explain principle, and also as this new provision explicitly reiterates, if the board decides not to adopt one of these methods, it is required to explain what alternative arrangements are in place and why these are seen as effective.

Earlier this week, LAPFF published a report - see here (pdf) - in which it explained the results of its research exploring whether and how companies propose to comply with this new provision on engagement. The headline finding is that two-thirds of companies in the survey have said that they will comply and, of these companies, the majority will appoint a designated non-executive director.