FTSE 250s outsource governance

Capita has become the first FTSE 250 company to appoint employees as non-executive directors to its board for over three decades.

Independent directorship and corporate governance expert Gerry Brown and author of ‘The Independent Director’ (www.theindependentdirector.co.uk), wonders why more companies – inside and outside the FTSE 250 – don’t seize the low hanging fruit benefits of in-house worker expertise in their boardrooms?

Brown has first-hand relevant experience of the benefits of staff participation at both board level as well as via company shareholding.  He notes, “When Theresa May sensibly proposed consulting over putting workers representatives on the boards of companies she quickly met strong opposition and criticism.  So much so, this idea soon went the way of all flesh and was quickly watered down before being quietly dropped.  There was wild talk that horny-handed sons and daughters of toil would inevitably hold back dynamism and growth of the company as well as their executive board betters as a result of their – apparently – inevitable struggle to master complex or rarefied strategic briefs.”

“Despite recently spotty performance in the outsourcing sector generally, when the outsourcing industry market leader decides to in source in house expertise and diversity of perspective, this surely must clearly indicate to other FTSE 250 companies that serious business reasons recommend it?” asks Brown.

“While it is all well and good experimenting with future performance and success of your clients with the panacea and magic bullet of outsourcing, obviously this isn’t the strong medicine – if given the choice – Capita actually inflict on themselves at board level,” continues Brown.

“Yet, nonetheless, 249 other FTSE 250 companies continue to outsource their independence of thought, strategic and corporate governance reality checks to non-executive directors drawn from elsewhere.  The ongoing litany of corporate scandals – too varied and numerous to list here succinctly – suggests that different perspectives remain very much needed in the boardrooms of our leading companies. Insourcing in house talent at board level rather than outsourcing it is long overdue in top FTSE 250 companies.”

Gerry Brown’s seminal book The Independent Director: The Non-Executive Director’s Guide to Effective Board Presence (www.theindependentdirector.co.uk) suggests that empowered experienced non-executive directors make real serious supervisory and strategic contributions at corporate board level.  Brown’s book also demonstrates worker representatives offer shareholders, pension funds, investors, management and the public many real implementable strategic and supervisory benefits in many key areas including as bridge between management and workers plus management and investors.  This provides fresh perspectives when it comes to diversity & inclusion, due diligence, business strategy and effective corporate governance.