Nick Clegg and Ed Davey welcome call for employee empowerment

9 January 2011

Giving employees a stronger voice in the firms that employ them will help Britain move towards a 'good capitalism' while boosting economic growth.

That is the view of the liberal think tank CentreForum, which on Monday will be publishing the findings of its research on workplace democracy in a paper entitled 'Employee empowerment'.

The paper has already been welcomed by the Deputy Prime Minister Nick Clegg and Employment Minister Ed Davey.

Nick Clegg said:

"Increased employee participation in how companies are run has been a longstanding Liberal Democrat principle, and CentreForum offers some radical proposals for how this can be promoted. Their paper deserves serious consideration."

Ed Davey said:

"There is strong evidence that the combination of employee empowerment and employee share ownership can help boost company performance."

"The CentreForum paper makes a powerful case for why this should be embraced as part of the coalition government's growth strategy of long term suppy-side reforms."

The paper has also been praised by Neal Lawson, chair of the left-wing pressure group Compass, who said:

"Innovation, creativity and endeavour can only come from people. It is high time we treated employees as grown ups and gave them a voice as workers, just as they have a voice as consumers and citizens."

"This paper shows not only how this can be achieved but that we are starting from a broad base of political support for greater employee empowerment."

Co-author of the paper and CentreForum's chief executive, Chris Nicholson commented:

"Employee empowerment is a policy with good liberal credentials. The strong evidence for it boosting company performance suggests it should form an integral part of the coalition's growth strategy. The question should not be why employee empowerment, but why not?"

ENDS

NOTES TO EDITORS

'Employee empowerment: towards greater workplace democracy' by Patrick Brione and Chris Nicholson can be downloaded.

Key findings and recommendations

There is strong evidence that giving employees more of a voice in the firm that employs them is of benefit to both the firm and the employees. Just as important is the democratic case: employees have a fundamental right to be involved in key decisions that affect their lives.

Boosting employee participation should therefore be an integral part of the coalition's growth strategy of supply-side reforms.

There is a package of measures that the government should consider to promote employee empowerment and workplace democracy:

• An information and awareness raising campaign.
• Promotion of increased employee empowerment as a norm to which employers should aspire and amendments to the UK Corporate Governance Code requiring listed companies to establish a policy of employee empowerment.
• Changes to existing Companies Act legislation to facilitate companies that wish to adopt a supervisory board structure.
• Requirements for board remuneration committees to include employees.
• If there is insufficient progress from these measures, new legislation should be considered. This should require companies that employ more than 250 employees to establish formal procedures for employee empowerment along the lines of 'European companies' provisions for employee participation.

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