Workforce Engagement and the UK Corporate Governance Code

Forthcoming in ‘Corporate Governance, Sustainability and Reputation’, II International Conference of Corporate Governance proceedings to be published by Thomson Reuters Aranzadi.

36 Pages Posted: 27 Apr 2021

See all articles by Katarzyna Chalaczkiewicz- Ladna

Katarzyna Chalaczkiewicz- Ladna

University of Glasgow

Irene-Marie Esser

University of Glasgow; University of Stellenbosch

Iain MacNeil

University of Glasgow - School of Law

Date Written: April 26, 2021

Abstract

The requirement to adopt one of three options for workforce engagement specified in Provision 5 of the 2018 UK Corporate Governance Code is an important development in terms of integrating stakeholder interests into board decision-making, resulting in better stakeholder engagement. At a high-level, the key provision providing for integration of stakeholder interests (s172 CA 2006) is focused on outcome: it specifies that the board should consider the relevant stakeholder interests. The move to Provision 5 indicates a shift to a more explicit process for the integration of a (limited set) of stakeholder interests and a move away from the reliance on disclosure as the primary regulatory technique.

The aim of this chapter is to evaluate the early stages of the implementation of Provision 5. We present empirical evidence on the options selected by companies, the rationale for adoption, overlap with pre-existing techniques and the role of the ‘comply or explain’ approach in facilitating the development of alternative models. We also consider the quality of disclosure, linked to Provision 5, and the manner in which disclosure and process work together to produce real impact on board decision-making in the context of workers’ interests.

Keywords: Corporate Governance Code, workforce engagement tools, stakeholders, board decision-making

JEL Classification: K

Suggested Citation

Chalaczkiewicz- Ladna, Katarzyna and Esser, Irene-Marie and MacNeil, Iain, Workforce Engagement and the UK Corporate Governance Code (April 26, 2021). Forthcoming in ‘Corporate Governance, Sustainability and Reputation’, II International Conference of Corporate Governance proceedings to be published by Thomson Reuters Aranzadi., Available at SSRN: https://ssrn.com/abstract=3834387

Katarzyna Chalaczkiewicz- Ladna (Contact Author)

University of Glasgow ( email )

Stair Building
5 - 8 The Square
Glasgow, Scotland G12 8QQ
United Kingdom

Irene-Marie Esser

University of Glasgow ( email )

School of Law
Glasgow, Scotland G12 8LE
United Kingdom

HOME PAGE: http://www.gla.ac.uk/schools/law/staff/irene-marieesser/

University of Stellenbosch ( email )

Private Bag X1
Stellenbosch, Western Cape 7602
South Africa

HOME PAGE: http://blogs.sun.ac.za/law/handelsreg-mercantile-law/

Iain MacNeil

University of Glasgow - School of Law ( email )

Stair Building
5 - 8 The Square
Glasgow, Scotland G12 8QQ
United Kingdom
+44 141 330 5863 (Phone)
+44 141 330 4900 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
628
Abstract Views
1,847
Rank
81,630
PlumX Metrics