Written evidence from FirstGroup (CGV0170)
History
Since the founding of the company, the Board has been committed to promoting employee involvement at local level believing that a considerable part of its overall success is attributable to such involvement.
The appointment of employee directors (EDs) to the Board enables directors to get an employee viewpoint on all matters affecting the direction and governance of the Group.
When the decision for the original buyout in 1989 of GRT (formerly Grampian Regional Transport) was made it was based on a “management led employee buyout” by Sir Moir Lockhead (Chief Executive, 1989-2011), who had a shop-floor background. At that time, as part of the buyout, two employee directors were appointed to the Board of GRT.
As GRT expanded its operations, it floated in 1994. GRT then merged with Badgerline (a bus company based in the Westcountry) in 1995 to become FirstBus, changing its name to FirstGroup in 1997 following the establishment of the UK Rail division.
Employee directors are enshrined in FirstGroup’s articles, as below:
74B …… the directors shall ensure that, at all times, one employee of the group has been elected by the employees of the group and who has been approved by the directors shall be appointed as a director. The employee director shall be subject to all of the articles relating to directors. The employee director shall cease to be a director immediately upon ceasing to be an employee of the group and the directors shall ensure that another employee director is appointed as a replacement.
In December 1996 Jean Weatherford, an Office Supervisor for First Lowland at Berwick upon Tweed was appointed as Group Employee Director. Since her appointment there have been three others namely:
• George Law, a bus driver based in Aberdeen, appointed in 2000 and serving to 2002
• Martyn Williams, a customer services supervisor based in Swansea, appointed in January 2003 and serving to 2012 (a maximum term of nine years)
• our present group ED, Mick Barker, a train driver with GWR, appointed in January 2012 and elected at the subsequent AGM.
FirstGroup has always had a relatively large number of employee shareholders by virtue of its origins as a management and employee buyout and the subsequent acquisition of similar companies during the 1990s. Even though the company has grown in size from 600 to 110,000 employees, the role of the group ED continues.
As well as a group ED, most of the individual rail and bus businesses which comprise FirstGroup’s two UK divisions (First Rail and First Bus) have an ED. These EDs perform a similar role to the group ED within each of their respective businesses, and meet regularly to network and share best practice. It is this forum which elects the group ED (see below).
Objectives
In the role description for EDs, their objectives are listed as follows:
• To promote employee involvement and participation in the affairs of the Group, through share ownership and other means
• To identify methods of achieving such employee involvement and participation and assisting the FirstGroup Board to implement these
• To encourage suggestions from employees for improvements in the business of the Group and identifying how such suggestions can be evaluated and implemented where appropriate
• To consider the implications for the Group of political developments and initiatives, particularly in relation to transport policy
• To consider issues of a strategic or commercial nature affecting the Group
• To exchange views on developments within the subsidiaries to assist the members of the Forum in fulfilling their role as Employee Directors.
Election and details of office
EDs’ term of office is three years from the date of appointment; EDs are able to stand for re-election (in practice, they tend to stand for no more than three terms).
EDs are elected by a ballot of employees in their company which is supervised by Electoral Reform Services or a similar independent agency. Candidates can self-nominate. To qualify for nomination, people have to have been employees of the relevant business for at least 12 months prior to the appointment and not be an elected trade union official (though, of course, they can be a trade union member).
The EDs take an active role at local level. They carry out safety audits and depot surgeries and can highlight to employees the many benefits and assistance provided by the Group. They attend the Safety and Environmental awards dinner and attend various functions as an “ambassador” of their company.
The FirstGroup Employee Directors’ Forum meets at least twice a year and invites the CEO, and other members of the senior management team to attend and discuss relevant matters with the Forum.
EDs elect one of their own number to be nominated as GED at this Forum. There is a specifically laid down procedure and ballot with voting supervised by the Electoral Reform Society.
FirstGroup businesses with Employee Directors
Mick Barker
Group Employee Director
Appointed: 2012
Mick was joined FirstGroup’s Board as Employee Director in January 2012.
Mick has been a railwayman for 40 years, the majority of them as a train driver.
He began his career with British Rail in 1976 as a driver’s assistant in Essex. He is currently employed as a driver for Greater Western Railway, one of the Group’s train operating companies; prior to that he worked for First Capital Connect.
Mick brings to the Board considerable knowledge of the attitudes and concerns of employees and represents their views to the Board and its committees.
Mick has a particular interest in safety and is a member of the Safety Committee. He attends all other Board committees.
Talking about his role as FirstGroup Employee Director, Mick Barker says:
"Employee directors are a part of the furniture at FirstGroup - we've been here since the company was created, in 1989.
“I serve as a bridge from the front line to board. In board meetings I have the same voice and voting rights as other directors; I’m invited to speak on any subject and I get just as involved as anyone else.
“But I spend most of my time at ground level, not the boardroom. I help spread information to ensure people in the mess rooms and depots understand what’s going on at board level and why decisions are being made – and so the board get a first-class understanding of what’s going on at the frontline.
“I’m a train driver by trade and I’ve been a member of Aslef for forty years. FirstGroup has a good relationship with its trade unions; employee directors provide a good complement to the work of unions and their reps – but we are never a substitute.”