Corporate Governance, employee director

FirstGroup plc – Annual report – 31 March 2018

Industry: distribution

Governance framework   (extract)

Our Group Employee Director

We are one of the few publicly listed companies that has an employee appointed to its Board (and also to the boards of most of its UK operating companies). This unique aspect of our corporate governance has been a feature of our Company since our origins in the late 1980s. Our employee directors have evolved with the Company as it has grown, which is one of the reasons that it is an accepted feature of the organisation amongst UK employees, and is not regarded as either an alternative to conventional industrial relations, nor an artificial adjunct to a corporate governance framework.

Since the founding of the Company, the Board has been committed to promoting employee involvement at local level. The appointment of employee directors to the boards of the UK operating companies gives directors an employee viewpoint on all matters affecting the direction and governance of the Group, and allows employee directors to engage with employees at a local level on the strategic direction of the business.

Employee directors are elected by a ballot of employees in their respective companies, which is independently supervised. They take an active role at local level, carrying out safety audits and highlighting to employees the many benefits and assistance provided by the Group. They have the same responsibilities as any other non-executive director and play as full a role as any director in challenging the senior management team.

The Employee Directors’ Forum meets at least twice a year and one of its functions is to nominate a candidate for the role of Group Employee Director when a vacancy arises. Last year the Employee Directors’ Forum nominated Jimmy Groombridge, whose appointment was recommended to the Board by the Nomination Committee. Jimmy was then elected by shareholders at the 2017 AGM.

Every Non-Executive Director brings a different perspective and experience to the Board; our Group Employee Director brings his experience as a frontline employee and helps ensure that the Board takes the views of the workforce into account in its discussions.

Corporate governance report (extract)

Our Group Employee Director

The Board considers that it is extremely beneficial for its employees to be represented on the Board so that employee-related issues are raised directly. The GED provides a two-way communication between the Board and employees. The GED is nominated by the Employee Directors of our UK operating companies at the Employee Directors’ Forum, and serves a maximum of three, three-year terms.