Business leaders invited to meet pension schemes to discuss employment practices

Business leaders in the UK have been invited by the Pensions and Lifetime Savings Association (PLSA) to meet with pension schemes to discuss their reporting of employment models and working practices.

In a letter to FTSE 100 chairs, PLSA chief executive Julian Mund said pension schemes responsible for £2.2trn of UK savers’ money, believe a company’s workforce is critical to its long-term success. Understanding how a company treats its workforce is therefore crucial to pension funds’ decisions about which companies they invest in.

How UK companies treat, motivate and engage their workforces has been the subject of intense government and public scrutiny in recent years – and investors also believe a company’s workforce is critical to its long-term success.

Corporate employment models and working practices on issues such as workforce diversity, pay practices and mental health issues matter substantially to investors and the PLSA believes they should figure prominently in companies’ annual reports. Failure to report this information also has the potential to negatively affect a company’s reputation, it said.

The letter to Chairmen follows a PLSA report published in April, ‘Hidden Talent 2: Has workforce reporting by the FTSE 100 improved?’, which found many companies fail to disclose workforce issues such as staff turnover, gender and ethnicity pay gaps, level of employee share ownership and supply chain ethics beyond the minimum statutory requirements.

With new disclosure regulations on the horizon, including new rules to require trust-based pension schemes to formally develop an ESG policy and the updated UK Corporate Governance Code, the PLSA hopes that engaging with the UK’s largest listed companies will encourage them to improve their reporting practices.

Commenting, Mund said: “It is the PLSA’s aim that these discussions will help UK companies to lead global best practice in relation to workforce disclosure and governance. It is only through working together on this issue that investors and companies can both deliver significant improvements to millions of working lives as well as delivering better returns to investors – and pension scheme members – over the long-term.”

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