New research has revealed a widespread lack of visibility and awareness of board members amongst retail employees, with 50% of respondents unable to name a single member of the board at the retailer they work for.
The research with 1,000 UK employees, conducted by TLF Research for technology firm eShare, saw 42% of respondents say their board is out of touch with day-to-day operations, while 59% of respondents say the board at their company could do more to be visible to employees.
“Two keys elements of good governance and a strong corporate culture are the visibility of the leadership team and a strong employee understanding of what that company stands for and is aiming to achieve,” said Alister Esam, CEO, eShare. “But many retail boards in the UK are not delivering on this, and they must do more to demonstrate transparency and to engage better with their employees.”
Retailers do not compare favourably to the overall findings when it comes to board diversity. Only 51% of respondents say there is a woman on the board at their organisation, compared to 63% overall, while 40% say there is no-one under the age of 40, significantly less than the 58% who said this overall. There was also less ethnic diversity on retail boards – 40% say there is no ethnic diversity compared to 55% overall. 65% felt that employee representation in the boardrooms would be a good thing, 10% higher than the overall findings.
“It is clear that many retailers have a long way to go in making their boards more diverse,” continued Alister Esam. “The addition of an employee to the board would certainly add a different perspective and is on the face of it a positive move. However, it is actually fraught with issues, from the possibility of immediate disclosure of company plans to employees, to the selection process of the employee representative, and there are more effective ways of improving senior level diversity.”
36% of respondents said that they do not understand what their company’s vision and values are, suggesting that UK retailers need to work much harder at bridging the gap between leadership teams and employees. More than half of those surveyed were in the dark about board decisions, feeling those decisions were not clearly communicated to the rest of the company.
“The pressure on boards to behave better and do business in a transparent fashion is greater than ever, and the best place to start is through smarter engagement with internal stakeholders,” concluded Esam. “Most businesses are better governed than they ever have been, but need to demonstrate this more effectively. Good governance in 2017 means knowing what you are and why you exist, being well-run from top to bottom and having internal values and behaviours that are perpetuated externally.”