The Governance Gap: Why Worker Voice Fails Without Structure
By Tom Powdrill, PDI’s Project Lead, Broadening Corporate Governance Participation
Just this January, the Colombian energy company Ecopetrol announced that its workforce had elected Cesar Eduardo Loza Arenas, a long-term employee and labour leader, to serve on the board of directors. This followed a shareholder vote in November 2025 which approved the creation of the worker director post.
The appointment is particularly significant given the importance of Ecopetrol to the Colombian economy. It has been framed in terms of democratisation and social justice, which is notable given the country’s history of political polarisation and violence. In his wider public and union work, Loza has argued that energy transition policies should protect employment and energy security, and that workers should have a direct role in shaping how decarbonisation is managed.
Ecopetrol is majority state-owned, so shareholder support was never in doubt. But it is an interesting development, given both the sector the company operates in and the country’s history, and prompts the question of why other countries do not adopt models of this type.
Workforce representation on company boards is an established governance model in various European countries, with the precise form of representation varying. There have even been recent moves to expand it, such as in Spain. Yet it remains rare in important markets such as the UK and the US.
In recent history it appeared that change might be coming, with increased interest in workforce directors in public policy circles in both countries. In the UK, this led to the inclusion of workforce directors as an option in the UK Corporate Governance Code. There was a corresponding small increase in the number of UK PLCs adopting the model. In the US a variety of reports and other initiatives promoted worker directors, and for several years some shareholders filed proposals on the topic, with one at Amazon in 2022 receiving a vote in favour of over 22%.
However, progress has stalled. In the UK, two of the small number of PLCs that had adopted workforce directors have since abandoned the model. In the case of Capita PLC this followed an announced leadership change and was shortly followed by a decision to end its commitment to paying the Living Wage.
Given the voluntarist nature of the UK regulatory regime, this has had no formal consequences for those companies. More importantly, such reversals highlight the fragility of arrangements that rely on leadership commitment rather than institutional anchoring.
This risk was anticipated at the time. Prior to the inclusion of workforce directors in the UK Corporate Governance Code, the then head of the Financial Reporting Council warned that attempting to introduce worker-elected directors through the Code risked high levels of non-compliance, noting that such a shift would require parliamentary backing rather than reliance on a comply-or-explain framework.
In the US, despite interest in workforce directors from some on both sides of the political spectrum, there is no immediate prospect of legislative support. At the same time, the SEC’s more restrictive approach to shareholder proposals has significantly narrowed that route as a mechanism for change in the foreseeable future. The resistance to iESG
Taken together, developments point to a common problem: while there has been interest in workforce directors, the institutional pathways through which they have been pursued recently in developed markets have lacked durability. Where adoption has depended on voluntarism, persuasion, or temporary alignment of leadership preferences, workforce director roles have proved vulnerable to reversal.
A reboot is required focusing on how the idea of worker voice in corporate governance is introduced, supported, and embedded institutionally.
Towards the end of 2024 PDI worked with the UK’s Railways Pension Scheme (known as Railpen) to co-host a webinar on workforce directors exploring the opportunities and challenges arising from the workforce director model of multi-stakeholder governance. Over the past year, PDI has engaged further with investors, worker advocates and governance specialists to learn more about experiences of and perspectives on the model, as we seek to develop this as an ongoing area of work in 2026.
Experience also suggests that justifying worker voice solely in instrumental terms offers fragile support. Where workforce representation is treated only as a means to improved outcomes for companies or investors, its legitimacy is at risk when those outcomes are contested. For this reason, PDI approaches worker voice as a legitimate end in itself, grounded in agency and power, while recognising that any viable model must also be compatible with established board responsibilities and commercial reality.
Based on our conversations over the past year, we have a sense of what would be required for workforce directors to become a credible and effective feature of corporate governance, but this requires further development. We aim to move beyond general principles and understand the specific conditions that contribute to workforce directors adding value, and to identify the supporting infrastructure that is required to deliver the most benefits.
Investors have not questioned the importance of workforce considerations to long-term company performance. Rather they have focused on whether workforce directors are required to deliver workforce-related improvements, and if such positions are compatible with established board responsibilities. The latter points to the need for clarity around fiduciary duties and that workforce directors are not there to negotiate in the boardroom.
Unions and other worker advocates emphasise the need for these to be roles with meaningful input into decision-making, not isolated individuals acting alone and unsupported, which entails selection and appointment mechanisms that involve the workforce directly.
What PDI has learned from these discussions provides a clearer picture of both the obstacles that have hampered wider adoption of workforce directors to date and the opportunities to design models that address concerns while strengthening board decision-making.
We are now launching an ongoing project to develop interventions in support of the workforce director model of multi-stakeholder governance in markets where it is currently absent. Throughout 2026 we’ll be regularly sharing our learning and thinking as the project develops. PDI’s work will focus on distinguishing where workforce directors are likely to operate as a durable and meaningful feature of corporate governance, where they are likely to struggle, and what this implies for investors, worker advocates and policymakers seeking meaningful, structural reform.