The Role of Corporate Boards in Employee Engagement

This paper highlights the growing recognition of the importance of employee engagement, and as that recognition increases, employee engagement needs to be recognized as a legitimate area of interest for boards of directors. After summarizing the increasingly understood connection between employee engagement and bottom line organizational performance, the authors contend that board members should — indeed must — make employee engagement a focus of their corporate governance duties. After showing evidence that the financial health and viability of firms are directly impacted by employee engagement, the study shows that boards have a duty to ensure that the top management makes such engagement a priority, just as they would require the management to protect the financial resources of the organization. The paper concludes that failing to do so is to ignore the demonstrated connections between employee engagement and the financial performance of the firm. The paper begins with the two accepted ideas of increased recognition of the importance of employee engagement and the long established fiduciary responsibility of boards of directors. It then blends these ideas in a fresh way and concludes with a brief anecdotal example from the healthcare industry