but as the day the UK decided “to raise awareness of the Employee Ownership sector at both national and local level across the UK and to illustrate the achievements and progress made since last year’s Employee Ownership Summit”, as the Employment Relations and Consumer Minister, Jo Swinson, announced on 30 April 2013.
Jo Swinson explained further in a letter to Employee Ownership Association members that “Employee Ownership Day is to raise awareness of employee ownership, as recommended in the Nuttall Review of Employee Ownership” and that “It will serve to showcase the wide range of successful employee ownership models including the pioneering work of the Cabinet Office in promoting public service mutuals”. The Government wants the many benefits the employee ownership business model can offer to be more widely known; it provides a catalyst for greater employee commitment; reduces absenteeism, staff turnover and accidents in the workplace; leads to high business productivity and profitability; and gives a business greater resilience through times of economic difficulty.
The coincidence of the Nuttall Review getting launched on 4 July 2012, and then, a year later, celebrating EO Day 2013 is a good one. There is a strong theme of independence in employee ownership, including independence of thought and economic independence.
Many of my firm’s employee owned clients exist because their founders had the freewheeling idea of enabling employees to acquire a controlling stake in the business for which they worked; typically as a succession solution.
The successors to the innovative John Spedan Lewis, Ernest Bader, Ove Arup and others can be found today. As the Daily Mail reported it is “pretty unusual to find a company where the millionaire boss is steadily and systematically handing over his shares to the staff”. This is what Gripple founder Hugh Facey is doing. We were delighted to help Hugh and his colleagues realise their particular vision for employee ownership by creating a private employee owned company, GLIDE (Growth Led Innovation Driven Employee Company Limited), which represents all the shareholder members.
Operating independently of outside influences is also important to employee owned companies.
Under the John Lewis Partnership constitution its governing authorities “should encourage creativity and an entrepreneurial spirit but must not risk any loss of financial independence”. Scott Bader’s website similarly declares that “Business relationships are more sustainable because Scott Bader cannot be taken over - it is totally independent”. Arup’s website explains how its “ownership structure – held in trust on behalf of its employees – ensures that Arup retains its independent spirit”. GLIDE continues this tradition with its object of promoting the “perpetual employee ownership of businesses”.
The co-operative movement is, of course, explicit on the need for autonomy and independence in its Worker Co-operative Code of Governance. Public service mutuals also refer to the importance of independence.
The Ownership Commission noted the higher survival rates of employee-owned businesses and that one of the main attractions of employee ownership, from the perspective of company founders and family-owners, is that it potentially preserves the identity of a company beyond a single generation of owners; it avoids the disruption and uncertainty that goes with ownership transfers, as encountered with, say, private equity ownership. The Ownership Commission observed that “once the bond of mutuality is broken, the nature of the business is fundamentally changed” and reminded us that ten of the largest UK building societies were demutualised, accounting for over 70% of the sector’s assets, but that by 2008 all ten had either lost their independence and been taken over by other banks, or had failed and been taken into public ownership.
This is why John Lewis Partnership, Scott Bader, Arup and Gripple and other employee owned companies and their supporters will be declaring on 4 July 2013 ...
“Today we celebrate our Independence Day!”
Graeme Nuttall, Partner Field Fisher Waterhouse, a Cabinet Office Mutuals Ambassador and, as the Government's independent adviser, author of the "Nuttall Review"
Visit the web site EO Day 2013 for links to more information including from the EOA and follow activity using #eoday and #employeeownership on Twitter.