A Labour government would require businesses to reserve one-third of seats on boards for representatives of their workforce, Jeremy Corbyn has announced.
Unveiling the policy as Labour’s annual conference gets under way in Liverpool, Mr Corbyn said it would give employees “a real say” in how companies are run and help rein in a “reckless corporate culture”.
Employee directors would be elected by the entire workforce and paid the same as other board members. They would be required to be members of recognised trade unions.
Under Labour’s plans, all companies with a workforce of 250 or more, whether public or private, would be required by law to reserve at least one third of places at the boardroom table for employee representatives, with a minimum of two.
Mr Corbyn said Theresa May had U-turned on her promise to put workers onto boards, watering down a pledge made in her 2016 leadership election campaign so that firms can instead nominate a non-executive director to represent employees.
The Labour leader said: “Workers are Britain’s real wealth creators. They deserve a seat at the table.
“In workplaces across the country, working hours have got longer, productivity has nosedived, pay has fallen and insecurity has risen.
“Businesses have been allowed to get away with such exploitative practices because the balance of power has shifted against workers. That has allowed a reckless corporate culture to fester which is damaging Britain’s economy.
“Labour will turn the tide and give workers more control and a real say at work. By ensuring businesses reserve a third of board seats for workers, we’ll help transform our broken economic model, as part of our plans to rebuild Britain for the many not the few.”
The announcement forms part of an effort by Labour to use its Liverpool conference to make a direct pitch to working class communities, which it says have been held back by years of austerity and neglect.
Party sources pointed to research showing that the UK has the lowest average business investment of any G7 nation as a share of GDP.
Labour blamed governance structures which give legal priority to shareholder interests over those of other stakeholders. Mr Corbyn believes this is fuelling a short-termist corporate culture, holding back economic growth.