‘Invisible’ Scottish boards amongst the worst in the UK for engaging with employees and showing transparency

The research, conducted by TLF Research for technology firm eShare, saw 19 per cent of respondents say their board is barely visible, with a further 22 per cent saying the board is not visible at all. 71 per cent 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 boards in Scottish companies are not delivering on this, and they must do more to demonstrate transparency, to engage better with their employees and communicate their vision more effectively.”

More than one-third of respondents said that they do not understand what their company’s vision and values are, suggesting that Scottish organisations need to work harder at bridging the gap between leadership teams and employees. Around half of those surveyed were in the dark about board decisions, feeling those decisions were not clearly communicated to the rest of the company.

60 per cent of those surveyed felt that worker representation in the boardroom would be a good thing, and a lack of board diversity was a common theme amongst respondents. 70% say there is a woman on the board at their organization (compared to 63 per cent overall), but 40 per cent say there is no-one under the age of 40 and 33 per cent say there is no ethnic diversity, compared to 58 per cent and 55 per cent respectively in the rest of the UK.

“It is fair to say that a majority of boards in Scotland are comprised of a very similar demographic, so it is not surprising that many workers feel their board could be 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.”

In terms of specific roles within a board, the Chief Executive Officer (CEO) was most visible to Scottish employees, although only 33 per cent could name the CEO at their company. The least visible was the chairperson, with only 7 per cent able to identify that role in their organization. 15 per cent are able to identify the Chief Information Officer (CIO), 8 per cent the Chief Financial Officer (CFO), and 12 per cent able to identify the Chief Marketing Officer (CMO).

More than half of respondents felt their board was out of touch with day-to-day operations at their 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 Mr 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 across the world.”