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Modern Capitalism and Employee Ownership

Deb Oxley of the Employee Ownership Association highlighted the opportunities and need for businesses to embrace employee ownership in her recent blog – Not Business As Usual. The post highlights some of the wider cultural and commercial impacts of achieving embedded employee ownership, in the context of the 2020 iteration of the global annual survey, the Edelman Trust Barometer, which found that over half of respondents thought capitalism today does more harm than good.

Employee ownership can be a way of bridging the disconnect between employees and their employers, by providing the employees with a real stake and opportunity to have their say in their organisations. One such form of employee ownership is an Employee Ownership Trust or EOT. 2019 saw a surge in high profile companies being sold to EOTs, including the likes of Richer Sounds.

EOTs offer an innovative form of long-term ownership, based loosely on the model established by John Lewis but adapted for the 21st century. They offer substantial tax incentives to encourage business owners to consider an EOT as an exit, one which allows a long-term independent business and succession plan to be implemented, rather than a sale to an external trade or Private Equity purchaser. Rather than becoming alienated and disaffected, employees take over the reins of the company under the support and guidance of the owners, securing a future path for the business aligned with its founding vision and ethos.

For further insights and to see the full results of the 2020 Edelman Trust Barometer, please click here.