It’s ironic that last month an arch-champion of Brexit, Tim Martin, adopted a practice common across many countries in the EU: having employee directors. The official reason is that this builds on JD Wetherspoon’s (JDW) existing policy of holding weekly meetings with pub and area managers to “distil suggestions from the front line”. It’s also in keeping with its policy of paying employees a bonus in cash and shares that pre-pandemic used to equate to over half the annual profit.
Martin owns 22 per cent of Wetherspoon and is its executive chairman. He regularly complains that aspects of the UK corporate governance code impede directors from fully understanding the business and culture of their companies. He’d like to see changes that reflect his own position, such as having long-serving executive and non-executive directors and companies being chaired by their former chief executives. These, he says, would deter boards from making decisions that are too short-term, and his past calls for more executive and employee directors were consistent with this.
This last view was supported by Theresa May when she became Prime Minister, but she settled for a fudge. Instead of requiring companies to appoint employee directors, they were instead permitted either to set up a formal workforce advisory panel or to give responsibility for raising workforce issues to a non-executive director. Most have plumped for the last option.