Unions Need Good Governance

Good governance in action? (Not the NEC, but the Russian Federation Council in session)


As trade unionists we demand, fairly, that the enterprises employing our members are run properly. We challenge bad management and expose the worst excesses – the Philip Greens and CityLinks and Sports Directs.  In short we champion good governance.

That is entirely correct, but do we do as we say others must?  What does good governance look like for trade unions?

It is an important question and not just because of the expectations we have of other employers.  Yes, other employers, because we are significant employers too.  And unions also are subject to the same commercial norms as every other business.  Yes – business, because if we spend more than we earn, we will go bust, just like any other business.

Well if only it were that simple. Because of course we are not just like any other company or even voluntary sector organisation. We have specific reporting and accounting responsibilities – the AR21 required by the Certification Officer for example.  We also have peculiar obligations under the so-called Lobbying Act.

Then there are the not-so-merry dances required by the Trade Union Act and the exposure to punitive legal action for failing to comply.

Whereas most firms in most sectors have their own regulatory jungle to cut through, the dynamics of unions give us a distinctive set of circumstances.  We are proud champions of democracy, but this sometimes leads to confusion or even conflict as to where authority lies – at head office or in branches.  Often it is at Conference – but only when conference is in session! And from an employment perspective, who should union managers talk to first about some big issue or other – their own staff side reps or the elected policy makers?

We champion diversity and inclusivity, but the numbers of employees or elected reps are rarely, if ever, in proportion with our membership in terms of age, gender, ethnicity (and so on). And attempts to press the issue, by the use of reserved seats, or the creation of bespoke networks or sections can be resisted, tokenistic or viewed as a distortion rather than a facilitator of union values.

And on top of all this, we have an electoral process for selecting leaders that seems – on the basis of turnout – to fail to engage the clear majority of union members.

We are, of course, like all membership organisations – struggling to reconcile what we do on organising and servicing. Except we can’t necessarily chose who to recruit or who, in a controversial legacy from the “closed shop”  (and how old does it make me feel to need to  hyperlink that!) era, who to expel. And we do seem to have attracted a stalker to rival the hostility of most of the mass media in the form of HMRC, who have thrust themselves upon a number of unions over the last couple of years.

This unique cocktail of circumstances and constraints actually makes good governance even more important.  Because some of the inevitable consequences of good governance are the very things unions need to survive today’s sometimes existential challenges: A strong, clear sense of purpose. An esprit de corps.  Clear lines of accountability and management. A “good to know” not “need to know” culture. Searching, identifying and sharing “best practice” being an expected virtue.

In my book, we need to go no further in the search for what “Good Governance” looks like in our world: It is summed up in these key outputs. And all of these characteristics are impervious to the servicing/organising conundrum, internal pension reform, hostile government, bad employers and “heart-sink” members. These are things that we can –should, must – do for ourselves.

I hope I will be caught in a metaphorical cloudburst of comments and contributions that show how good governance is the norm and not, as I fear, still mainly an aspiration.

And before anyone gets carried away,  let’s not forget that the union movement is the largest membership based outfit in the country and what we deliver for and with our members changes lives and society.

This piece also appears on the Unions21 website. The Unions 21 conference on 21 March will look at what unions can do  to increase capacity and extend our influence – including some essential elements of good governance. You can  find ourt more and register for a place at http://bit.ly/2kgUGbh

Why May Must Say Yes to Worker Directors

Industrial democracy has made a welcome return to the political front line. With positive news for workers and the economy in general hard to come by, this could be a glimmer of good news in a fairly bleak winter.

I’m talking of course about the idea of Worker Directors. Theresa May has been tying herself in knots on this – showing rather less poise than Ed on Strictly – having first pinched the idea from Ed Miliband, going big on it on her  way to Downing Street, pulled the plug on it in front of the CBI and finally rekindled interest in response to a question from Gloria del Piero at the fag-end of last week’s PMQs on Wednesday.

But the idea of worker directors is not new – the modern era opened with the Bullock Report into industrial democracy in 1977. As debates at the time illustrate, then, as now, this was seen as something of a magic bullet for solving deficiencies in employee engagement and boardroom arrogance.

Bullock directly lead to six worker directors being appointed to the board of the then-state run forerunner to BT.  The experiment ran from 1978 to 1980, all concerned felt it was successful, but it was allowed to lapse by the in-coming Thatcher government who perhaps already had privatisation in mind.

The value of the worker director concept works on two levels. On the plus side, they have important symbolism. A witness in the boardroom. A civilizing influence to curb corporate excess. An advocate of realism to speak truth unto power.

But a more inclusive approach can also lead to real change, especially as part of a wider democratization of workplaces. The TUC’s 2014 report on workplace democracy set out clearly and convincingly how and why more inclusive employers would also be more effective and efficient.

Both the symbolism and practical effects of Worker Directors speak to issues regarded by employees and workers as being important. UKCES survey work paints a picture of  “a climate of fear [as] employees face greater stress and job insecurity while working harder.”

But nor should the potential of worker directors be over-stated : They can only ever be one part of effective employee relations. And they can actually be very damaging to industry if mistakenly seen as a panacea.

You can immediately see the limitations: What are the terms of reference? What is off-limits? What information has to be disclosed – and when? Is there enough time and detail to form the basis for a proper discussion?  The fundamental constraint is that worker directors are always, always “playing away” – the agenda is set, predetermined. They cannot on their own bridge the gap between boardroom and shop floor. They do not replace effective communications within a company and they are too restricted in number and scope to be a truly effective tool for employee engagement.

And the very real risk is that this then becomes a tick-box exercise. “We’ve got a worker on the board, what more do we need to do?” The answer is likely to be “nothing”.

So worker directors need to sit alongside effective collective bargaining arrangements. They can certainly add value and encourage dialogue at a strategic level.  But we need to be aware of the capacity for worker director arrangements to act as black holes – sucking everything in, generating no light or understanding, leaving nothing outside.

Quite apart from the PM’s acrobatics, the high level of interest in the latest Government consultation on corporate governance shows it remains a live issue. But  if employers try to  weaken  consultative strictures in favour  of more limited and regulated dialogue  with worker directors,  they should not be surprised to find poorer  outcomes as a result.

And we may not even get as far as this debate on practicalities. As the TUC’s  Janet Williamson  observes,  “appointing a non-executive director to speak on behalf of the workforce or setting up a stakeholder advisory body are not the same as putting workers on company boards. Don’t think that working people won’t notice the difference.”

In this era of post-truth left-behind politics, worker directors would seem to be a straightforward win-win issue. The PM has a choice to make here; I hope she makes the right one.