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Boardroom Challenges: Why Listening to Employees Matters

By Nicole Vaughan · 25 May 2023

Employee voice is a valuable source of information for any company that wants to improve its performance, culture and reputation. Employee voice is used to describe the ways in which employees communicate their views, opinions, and concerns to their employers. It can be captured in many ways such as surveys, feedback sessions, suggestion boxes, meetings, committees, unions, and social media. And it enhances employee engagement, motivation, satisfaction and performance. Employee voice also helps identify and address issues, improve decision-making and foster a positive organizational culture. However, employee voice can face various challenges and barriers, such as power imbalances, organizational culture, resistance to change and fear of reprisal. Therefore, it requires a supportive environment that fosters trust, openness and mutual respect between all parties. When companies fail to listen and respond to their employees' voices, they may end up facing grave consequences.

3 Companies whose boards ignored employee feedback and suffered the outcomes

Uber was rocked by a series of scandals in 2017. The company faced allegations of sexual harassment, discrimination, theft of trade secrets, and unethical business practices. Many of these issues were raised by employees who tried to alert the board and management but were met with indifference or retaliation. The company's founder and CEO, Travis Kalanick, was eventually forced to resign. Wells Fargo, the banking giant was exposed for creating millions of fake accounts and charging customers for services they did not want or need. The scandal resulted in billions of dollars in fines, lawsuits and settlements, as well as the loss of trust and reputation. The company's board was accused of failing to oversee management and not acting on complaints from employees. The company's CEO, John Stumpf, was also forced to resign and faced congressional hearings and criminal investigations. In April 2017, the board of directors released the results of its independent investigation which sharply criticized the bank’s leadership, sales culture, performance systems, and organizational structure as root causes of the cross-selling scandal. Boeing, the aerospace company faced a global crisis after two fatal crashes of its 737 Max jets in 2018 and 2019. 346 people were killed and the entire fleet of 737 Max planes was grounded until 2020 in the US and 2021 in the UK and EU. The company was found to have cut corners on safety and quality, and to have misled regulators and customers about the features and risks of the jets. Boeing’s board was criticized for failing to hold management accountable and to listen to the warnings of engineers and pilots who raised concerns about the jets' design and software.

Impact on Business

Ignoring the voices of your employees can be a costly mistake for you that should not be ignored. Reputational risk is a top strategic business risk that can affect the value, performance and sustainability of a company and key individuals. Losing trust, credibility and confidence among key stakeholders, such as employees, customers, investors, regulators and suppliers can result from ethical misconduct, security breaches, product failures, third-party actions, or poor crisis management. The agendas of CEOs and senior executives can shape what boards perceive and accept. Ensuring you gain access to insights from employees, those closest to your customers and solutions is vital for competitive advantage, employee and customer loyalty, retention and bottom-line growth.

Future

You and your fellow board members play a strategic role in creating a culture of voice and listening to the views of employees and other stakeholders. You can leverage employee voice to improve decision-making, risk management, performance and reputation...your reputation as a board member along with the organization’s reputation. Boards can enhance their accountability and transparency by reporting on how they engage with employee voice and act on the feedback. How will you ensure your board has a way to view employee insights in the boardroom before problems arise? Nicole Vaughan, CEO & Founder of myCandr