Investor statement on workforce directors

We are 8 global institutional investors with around £400bn AuM as of 31 March 2023. As long-term, responsible investors, we incorporate environmental, social and governance factors into our investment decisions and our stewardship activities. Our goal through doing so is to create long-term value for our beneficiaries and clients.

Caroline Escott / 18 April 2023

A company’s workers are fundamental to its long-term success. Taking care to have an engaged workforce, and intentionally including the workforce perspective in strategic decision-making and corporate governance processes, is therefore likely to pay off.

As investors, we do not believe there is a single ‘right’ way to incorporate the worker perspective, which suits every firm in every sector. However, we believe some more companies in the US and UK could, for example, consider appointing a workforce director to their board, given workforce directors can efficiently provide benefits over and above – and ideally in combination with – other workforce engagement mechanisms. This owes to:

  • Enhanced cognitive diversity of the Board, and the subsequent benefits for decision-making; and
  • Workers feeling they have a voice in the running of the company and becoming more engaged as a result, with positive impacts upon a firm’s financial performance.

As asset owners and managers, we commit to engaging productively with companies and/or our managers on workforce directors, bringing either our own experience, or perspectives drawn from discussions with a wide range of other firms, organisations and our investment managers to conversations on this issue.  We also promise to listen to companies’ perspectives and explanations, and to be vocal in our support where we think a meaningful approach has been undertaken on workforce directors.

In return, we encourage companies to:

  • Think about how best they can effectively engage with their workforce, which could include genuine consideration of the question as to whether appointing one or more workforce directors might be a suitable and effective workforce engagement mechanism;
  • Consider our guidance and in particular, our suggestions around “role, recruitment and retention” to support an approach which evidence so far shows could work in everyone’s interests;
  • Report to investors on the approach to workforce directors in a meaningful way (and ideally in the Annual Report), including a rationale for the approach taken, the outcome, any lessons learned and next steps (where relevant).

Those of us who use external asset managers also encourage our managers to raise this guidance with their investee companies and report back to clients on the nature of these conversations, and any progress achieved.

We are grateful to the investor, academic, corporate and worker community for their support in pulling together our guidance. We encourage and welcome other investors who wish to join us signing this statement.

Please contact for further information.

Supported by:

Border to Coast

Brunel Pension Partnership

Church of England Pension Board

Merseyside Pension Fund

Rathbone Greenbank Investments

Royal London Asset Management

Universities Superannuation Scheme