For some businesses, it's not always as simple as announcing a purpose-led strategy – if key stakeholders are not aligned, an organisation cannot be certain that its ethical approach is guaranteed into the future. One solution that offers a different model is employee ownership – it aims to root an organisation in its community and allow it to have a longer-term outlook.
We recently took part in a panel as part of Stir to Action's online festival to discuss the subject with experts in the field. Simon Crichton, Triodos’s acting head of business banking, joined the conversation alongside Deb Oxley, chief executive of the Employee Ownership Association (EOA), David Sproxton, co-founder of Aardman Animations and Ben Watson, leader of the employee ownership team at TLT. The panel was chaired by Jeremy Gadd of J Gadd Associates.
Here, Simon shares three of his top take away messages from the discussion.
Employee owned organisations can create a fairer working environment
Deb Oxley kicked off the discussion, giving an overview of employee ownership (EO) and highlighting some of the key benefits of the model. She explained the formal definition in the eyes of the EOA, namely that ‘employee-owned businesses are totally or significantly owned by their employees’, with shares held either directly by the employees or in a trust.
Deb explained that employee ownership gives people an opportunity to have a say in how the business that they work for is run. ‘You can bring ownership to life through the voices of employees,’ she added. The idea is to move away from business models where a small number of shareholders hold all the cards, to a fairer, more inclusive way of working.
Collaboration can generate resilience
Film studio Aardman, best known for its Wallace and Gromit animation, became employee owned back in 2018. Founders David Sproxton and Peter Lord transferred the majority of shares into an employee ownership trust because they wanted to ensure that the organisation remained independent and to secure its creative culture.
Speaking on the panel, David flagged that he felt employee-owned organisations were better set to remain resilient in times of crisis, such as the recent turmoil created by Covid-19. The collaborative spirit generated by employee ownership and the mutual invested interest can foster better problem-solving skills to overcome challenges.
David also highlighted the importance of guidance for business owners going through an ownership transition: Aardman was supported by both J Gadd Associates and Ben Watson's team at TLT.
The movement is gaining momentum
Interest in alternative ownership models is gathering steam, and there’s good reason to believe that employee ownership can play an important role in how we build back better. I mentioned that Triodos Bank supported Riverford’s move to EO several years ago and that we’re now seeing increased interest from businesses looking to finance such a transition.
Events of this year have shown us the importance of businesses focusing on employee wellbeing and positive social impact in the communities that they serve. The pandemic has given us an opportunity to reset our economy and to consider how diverse business models can foster long-term value creation, rather than simply short-term profit.
About the event
This panel discussion took place during 'A Playground for the New Economy', a virtual festival hosted by Stir to Action. Stir to Action works to foster new economic thinking through events, training programmes and a quarterly magazine. If you missed the festival, you can find recordings of the sessions here.