For the average tech worker, company boards of directors are a bit like the mysterious overlords making an appearance in Phase Three of the Marvel Universe. They rake in huge amounts of cash and power, and occasionally make decisions that radically alter how a company works, but no one seems to know much else about who they are and what they do.
Honeycomb.io, a San Francisco-based tech startup that provides data observability tools, has decided to try to change that by doing something radical for U.S.-based companies — putting a regular employee on the board of directors.
Paul Osman, a staff platform engineer employed at the company for the last two years, will join the Honeycomb board in January as a regular voting member for one year. While there might be private companies with an employee board member, none of them have done so publicly, at least not in the research done by Charity Majors, Honeycomb’s chief technology officer and cofounder, and Liz Fong-Jones, a developer advocate at Honeycomb who brought the employee board member idea to the company when she joined.
Employee boards of directors are common outside of the United States; in Europe, employee representatives are fairly common, and German law requires significant employee board representation for large public companies. The idea has gained popularity in the United States among labor organizers and progressive political leaders over the last few years. Both Microsoft and Alphabet (as well as Walmart) were forced to hold votes on electing board members at their 2019 shareholder meetings, though the proposals lost by sweeping margins. Sen. Elizabeth Warren introduced a bill in 2018 that would require employees to elect a portion of the board members for large public corporations and has continued to advocate for the idea.
Employee board representation laws in Germany stem back to World War II, when requiring employee board members was seen as a way to preserve the power of workers while holding corporations accountable for their cooperation with the Nazi regime. The long history of representation there has given researchers decades worth of material to examine the effect of the practice. They found that little has changed in terms of the company’s long-term value or financial success, but workers tend to have slightly higher wages and higher productivity, while the company outsources less and tends to invest more in fixed assets like equipment and machinery.
At Honeycomb, Osman’s one-year board tenure is essentially a pilot program to demystify the board of directors and to test whether employees and the board see the experience as adding value to the company. Majors and Osman didn’t have clear, specific ideas of what a successful one-year experiment would look like, or how they will decide in a year if they would like to continue the practice, instead describing it as an open-ended question for everyone involved.
Majors and Honeycomb’s CEO and other cofounder, Christine Yen, had to persuade their board that trying a practice so entirely unique in the United States was worth the risk. “The board is just as curious as we are. We are all kind of waiting to see what the outcome is. We didn’t do this to try and be a trendsetter,” she said.
Osman won’t be acting as a direct representative of every employee or have any rules around how he decides how to vote in board decisions. Instead, every employee interested in taking the one-year experimental board seat ran in a ranked-ballot election, and Osman won.
“At the end of the day, it has to be my call — I’m not there as a proxy for people. My job is to take other people’s perspectives to account,” he said. “One of the reasons I put my name in the hat to run for this position internally is that I feel like I do have a connection to people. At the end of the day, it’s going to have to be just like any other board member balancing the various needs of stakeholders.” Osman also said that he hopes that his presence on the board will make it easier for directors to ask questions about and understand the employee experience and employee needs.
One of the main reasons for putting an employee on the board in the first place is making clear to job candidates that Honeycomb places a high premium on transparency and trust, according to Majors. “This isn’t about trying to attract people with ping pong in the office, and free beer. This hits the different level of attracting certain employees,” Osman said.
“It’s so part of who we are as a company. We are transparent to the point of foolishness sometimes; one of our company values is that we hire adults,” Majors said. “This is all kind of in the zeitgeist right now because people are demanding more of their employers … When you look at labor relations in the Valley, there’s a need for innovation right now,” she added.
