New research has revealed a widespread lack of visibility and awareness of board members amongst Financial Services (FS) employees, with 30% of respondents unable to name a single member of the board at the firm they work for, and more than one quarter saying their board was either barely visible (19%) or not visible at all (10%).
The research with 1,000 UK employees across different sectors, conducted by TLF Research for technology firm eShare, saw 56% of respondents say their board is out of touch with day-to-day operations, while 72% of respondents say the board at their FS 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 FS boards in the UK are not delivering on this, and they must do more to demonstrate transparency and to engage better with their employees.”
FS firms do not compare favourably to the overall findings when it comes to board diversity. While 67% say there is a woman on the board at their organisation, compared to 63% overall, only 52% say there is no-one under the age of 40 or any ethnic diversity, compared to 58% and 55% respectively overall. 66% felt that employee representation in the boardrooms would be a good thing, 11% higher than the overall findings.
“Like most other sectors, FS firms have a long way to go in making their boards 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.”
“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. Most businesses are better governed than they ever have been, but need to demonstrate this more effectively,” Alister concludes.