'Mission led' Legal & General has mission to thwart employee directors

The insurer has responded to the Government's corporate reforms with a backward looking cop out

Legal and General (Reuters)

Legal & General likes to portray itself as a forward looking ‘mission led business’ but when it comes to its employees it’s backward thinking that prevails in the boardroom.

Afforded the opportunity to show leadership by putting a member of its staff on the board to represent the interests of employees, it chose the cop out option. The one that the Tory Government included in its limp corporate reforms as a sop to keep a business community that is rapidly falling out of love with it semi sweet.

As such Lesley Knox, the chair of the remuneration committee, whose main role is keeping CEO Nigel Wilson and his executive colleagues happy when payday comes around, has been appointed as “the designated non-executive director for engagement with the Company's workforce”. Whatever that means. Probably that she will have to hold a few meetings and give a presentation or two to the board over lunch after the real business has been done.

The announcement of her new role makes L&G one of the first companies to publicly respond to what the Government described as a “world leading” package of corporate reforms, presumably so we can all have a good laugh when the Brexit roof is falling in.

Since it was ushered in, most of Britain's top companies have basically been waiting to see which way their peers jump in response. L&G’s first mover status tells them that doing not very much is not only just fine, it’s to be positively encouraged. L&G, remember, is one of Britain's biggest investors and as a tracker fund manager is prominent on the shareholder register of every member of the FTSE 100.

Sadly, this shouldn't come as much of a surprise.

L&G made a detailed response to the Government’s consultation on the issue, which will have been heard very loudly given that its chair, Sir John Kingman, was a senior Treasury mandarin in another life and has served on lots of important public bodies.

It basically told ministers that what we have is just fine and that change is scary but we know you want to keep the plebs quiet so how about letting companies assign an existing independent non executive director to pretend to care about the workers by taking "the time to meet employees at different levels in the business to better understand their views”. We'll even call them an "employee champion" if you like.

That's the sort of cynicism that you can file under the heading of PR, something that Sir John, as a former press officer, knows a thing or two about.

No doubt the next annual report will contain a picture of Knox smiling across the table from some similarly jolly, photogenic staff. If the L&G comms team is really on the ball, they might rustle up the chap in the wheelchair from the third floor to be in the shot. It will be accompanied by some blurb that no one will actually read featuring the repeated use of the word “stakeholder”.

When they look at the proofs, the L&G board will probably congratulate itself on the role it played in killing off one of Theresa May's vanishingly rare progressive ideas and keeping those pesky plebs quiet.

Sorry Sir John, but on the last of those you’re out of luck. Those of us plebs who support a more enlightened corporate culture aren’t inclined to let this one go so easily.

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