The EOA is calling on the government to invest in growing employee ownership in the UK economy with the aim of having 3 million employee owners by 2030.
The call comes on the back of the findings and recommendations of the Ownership Effect Inquiry, which was led by the EOA and supported by The eaga Trust and the John Lewis Partnership with the academic support of Professor Ajay Bhalla and Dr Aneesh Banerjee of Cass Business School and Professor Joseph Lampel of Manchester Alliance Business School.
With the risk to the UK of two thirds of SMEs and family businesses facing succession uncertainty – an independent panel of 20 leading business organisations, including the IOD, ICAEW, ACCA, ICAS, ICSA, IFB, FSB, CMI and CIPD, recommend it’s essential to unleash the benefits to the economy of more employee ownership.
The Ownership Dividend, the evidence report of the Ownership Effect Inquiry launches today (June 27) at an event at IOD with speeches from Inquiry Chair Sharon Bowles, Chairman of John Lewis Partnership Charlie Mayfield, Chief Executive of the CIPD Peter Cheese, Deb Oxley of the EOA and David Hunter of Stride Treglown.
The panel of the Ownership Effect Inquiry, a year-long independent business-led review, heard evidence from 100 employee-owned businesses and advisers at seven hearings across the UK. Its findings concluded more employee-owned businesses would improve UK productivity, enhance the resilience of regional economies by rooting jobs locally and motivate more engaged employees through transparent and effective models of corporate governance.
To coincide with the launch, the government is being urged to invest in capacity building for employee ownership in the UK, which echoes the successful approach by the Scottish government, supported by trailblazing regional pilot projects focussed on resilience and succession as well as a national strategy for business ownership.
Baroness Sharon Bowles, Ownership Effect Inquiry Chair, said:
“The Panel’s conclusion is clear: there is a significant and valuable dividend to be obtained from creating greater amounts of employee ownership in our economy.
“I am proud to have chaired this independent Inquiry that has produced the most comprehensive, robust and compelling evidence about employee ownership in the UK to date supported by the academic rigour of Cass and Alliance Manchester Business Schools.
Richard Marr, Chief Operating Officer of the The eaga Trust, said: “We are delighted to have supported the Ownership Effect Inquiry and the launch of the evidence report the Ownership Dividend – the pinnacle of a year’s work.
“With the employee-owned sector growing considerably over the past five years, and at a time when the economy is ready for ways to prepare for the challenges ahead, there is no better time to showcase the results of the most comprehensive study of employee-ownership in the UK and look for support to truly realise the Ownership Dividend in the UK.”
Deb Oxley, CEO of the Employee Ownership Association, said: “The UK economy is imbalanced – between regional wealth, access to skills and ownership of capital – leading individuals to experience inequality in prospects and economic well-being, which in turn has an effect on personal motivation and corporate productivity.
“The Ownership Dividend benefits individual employees through delivery of better work and greater financial opportunities and together, employees’ extra discretional effort as owners impacts positively on corporate performance. The ownership dividend also helps businesses to maintain an independent and sustainable model of ownership, and subsequently roots jobs and investment locally and more resiliently.
“To increase the ownership dividend to the economy we call on the government to invest in capacity building for employee ownership, that echoes the successful approach in Scotland, supported by trailblazing regional pilot projects focussed on resilience and succession as well as a national strategy for business ownership.”
Sir Charlie Mayfield, Chairman of John Lewis Partnership, said: “The most valuable asset to a business in driving productivity is its people. Employee ownership is business powered by its people, for its people.
“The Ownership Dividend shows the significant benefits from giving employees a meaningful stake and share in the value that they create – not just financially but also in terms of motivation, wellbeing and fulfilment at work.
“With the significant shifts currently taking place in the workplace and in society, it is time to take a fresh look at the dividends that increasing employee ownership can offer to the UK economy and society.”
Peter Cheese, Chief Executive of CIPD said: “The employee ownership solution though not for every setting, is a model that can address a number of workplace and business challenges, helping to create sustainable organisations for the long term. It can support clearer and more inclusive governance, reward structures, more engaged workplaces, progression for employees, and clear succession for business leadership.”
“The changing world of work requires innovation and different operating structures for organisations as much as it requires people to work in different ways and to acquire new skills. The employee ownership model is one which is particularly relevant in the SME sector and provides a useful governance approach for future succession and growth.”