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klaas woldring
26 Posts |
 Posted - 03 Nov 2005 : 13:15:50
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Shared company
21 October 2005
Friday 21 October 2005
UK CHANCELLOR WELCOMES REPORT ON EMPLOYEE OWNERSHIP
The Rt Hon Gordon Brown MP, Chancellor of the Exchequer, has welcomed the publication of a new report on the growth of the employee owned business sector. The Chancellor was speaking at the launch of 'Shared Company - How Employee Ownership Works' published today [21 October 2005] by employee ownership body JOL.
The 'Shared Company' reports estimates the size of the co-owned business sector at around £20-25 billion and says its growth is due partly to companies' success at winning one of the most prized business goals - employee commitment.
The report dispels myths about employee owned businesses - pointing out that they operate in highly competitive markets, are strongly profit-orientated, and have decisive professional managements. Key differences, the report says, are that employee owned companies use profits differently, and have parallel governance systems that ensure employee involvement and management accountability.
'Shared Company' surveys recent international research evidence which confirms that a combination of a financial stake, employee participation and what it terms a collective 'voice' for staff produces superior business performance.
The report praises successive Chancellors for creating share schemes that encourage staff to hold a stake in their firms. But it calls on Gordon Brown to reconsider the removal of tax help for employee trusts. 'Shared Company' says such trusts are a key way to finance employee buy-outs and to stabilise employee owned companies.
A sign of employee ownership's growing credibility, the report says, is Royal Mail's reported intention to create a large employee stakeholding in the state owned company. JOL recently published a paper on the future ownership of Royal Mail.
The employee owned business sector benefits the UK by boosting an enterprise mentality among staff, fostering good employment relations, and enriching the diversity of successful business models in the economy, 'Shared Company' claims.
Speaking at the report's launch, the Chancellor praised JOL's role in representing the views of employee owned companies. Formed in 1979 as Job Ownership Limited, JOL is the association of employee owned and trust owned businesses. The 'Shared Company' report is available to download free at http://www.employeeownership.co.uk/ .
ENDS
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Alan
87 Posts |
Posted - 07 Nov 2005 : 19:10:09
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It is reported that the following statement was made by Gordon Brown MP (the UK Chancellor of the Exchequer ) in his speech at launch of JOL's "Shared Company" report:
"Employee ownership is world changing. It is the way ahead for the UK in the global economy. It reflects that human capital is becoming more important than physical assets. A company is more and more defined by its skills. It relies more on its creative energies. I am here to celebrate the great achievement of employee ownership. The global economy will succeed when employees feel they have a stake in the business."
This is a very encouraging statement on employee ownership from such a senior politician. Of course, with the 'Shared Company' report estimating that the size of the co-owned business sector in the UK is now at around £20 billion ($A47.4 billion), he has something to be encouraged about. This can be compared to the latest annual turnover of the well-known Mondragon complex of employee owned companies in Spain (now employing 71,000 employee owners with $A5.8 billion in employee equity) at $A16.6 billion a year, to give you some idea of just how significant the employee owned sector has become in the UK over recent years. It also suggests the importance of this industrial development which seems to have passed Australia by (for the lack of institutional support).
As Gordon Brown points out, this growth "is due partly to companies' success at winning one of the most prized business goals - employee commitment".
Alan Greig
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Alan
87 Posts |
Posted - 18 Feb 2006 : 11:42:27
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As well as dispelling those myths that employee owned businesses are not competitive, profit oriented and managed professionally, the "Shared Company" Report surveys recent international research which confirms that a combination of a financial stake, employee participation and what it terms a "collective voice" for staff produces superior business performance.
The report says that advisors often overlook selling a compnay to its employees as a solution to business succession problems in owner-manged companies.
Graeme Nuttal of Equity Incentives in the UK and a co-author of the report has said about the report:
"This report highlights how employee trusts can be a key ingredient in achieving increased productivity in all companies, whether listed or not and even if the employees' stake is a minority stake.
Research suggests there are three key drivers to achieving improved corporate outcomes through employee share plans. Employees need to benefit financially and participate individually in decisions: there also needs to be a staff collective voice. This is where employee trusts have an important role."
A copy of "Shared Company" is available to download free from the UK Employee Ownership Association's web-site at: http://www.employeeownership.co.uk/ .
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admin
631 Posts |
Posted - 10 Mar 2007 : 05:42:42
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WHY COCO SPELLS HAPPINESS AT WORK
19 February 2007
Report reveals how the ‘John Lewis effect’ is behind a growing sector
Firms where staff have a big ownership stake and a say in decisions are more productive because employees feel happier at work, according to a paper published today [Monday 19 February] by the Employee Ownership Association.
Author Richard Reeves calls these firms ‘CoCo Companies’ - because staff co-own the business and co-create what customers buy. The result, says Reeves, is a “stealth sector” of the economy worth a combined turnover of £20-25 billion annually and growing. John Lewis and Waitrose, both parts of the employee-owned John Lewis Partnership, recently topped a survey of the nation’s favourite shops.*
The paper, launched at a Parliamentary reception with Environment Secretary Rt Hon David Miliband MP, claims the sector’s growth has implications for Government – with so-called CoCo firms reducing absence, generating staff wellbeing, contributing to local communities, winning employee commitment, and pleasing customers.
According to Barry Cooke, boss of co-owned architects Make, quoted in the paper: “People who feel good about themselves and their job create a better product – it is as simple as that.”
The CoCo effect comes, the paper says, from staff feeling committed to the business – because they co-own it – and willing to ‘go the extra mile’ because their views count in the company.
But the paper criticises business advisers still ignorant of a sector that includes success stories like John Lewis and Waitrose as well as global corporations such as logistics giant Unipart, designers Arup, and PA Consulting, and a host of smaller businesses. Although more business owners are now ready to contemplate co-owned start-ups or buy-outs, Barry Cooke of Make – a start-up firm only three years ago – warns: “If you go to an accountant or consultant, they’ll talk about limited companies, partnerships and so on. Employee ownership won’t come up.”
The paper calls on Chancellor Gordon Brown to aid the sector by encouraging co-owned start-ups in economically disadvantaged communities, and establishing a fund to finance the establishment of employee-owned businesses. Business schools are advised to add modules on co-ownership techniques to MBA programmes, and the paper calls on accountancy and local enterprise bodies to do more to ensure business owners get more balanced and expert advice about ownership options.
* Which? customer satisfaction survey, February 2007.
ENDS
Notes for Editors
‘CoCo Companies: Work, Happiness and Employee Ownership’, by Richard Reeves, is launched at a Parliamentary Reception with Rt Hon David Miliband MP, Secretary of State for Environment, Food & Rural Affairs, on Monday 19 February.
The Employee Ownership Association [formerly Job Ownership] is a network of companies largely or wholly owned by employees. Formed in 1979, its members include the John Lewis Partnership, Arup Group, Unipart Group, founder members Scott Bader, and a range of other businesses.
The paper includes a Foreword by Sir Stuart Hampson, president of the Employee Ownership Association and chairman of the John Lewis Partnership.
Richard Reeves presented the BBC2 series ‘Making Slough Happy’ and is author of ‘Happy Mondays – putting the pleasure back into work’.
‘CoCo Companies’ is available to download free from Monday 19 February 2007 on the Employee Ownership Association website at www.employeeownership.co.uk
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admin
631 Posts |
Posted - 18 Mar 2007 : 09:57:04
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A Sample of Co-owned Companies in the UK
The following are examples of employee owned companies in the UK extracted from the report “CoCo Companies: Work, Happiness and Employee Ownership” (page 9) by Richard Reeves, 2007, for the Employee Ownership Association (UK), the press release for which can be seen in the post above. You can see this report at:
http://www.employeeownership.co.uk/publications.asp
Arup
Arup is a 7,500-strong international engineering and consultancy business. With a turnover of £500 million, this sixty-year old firm is entirely owned by trusts including a charitable trust and employee trusts. See: www.arup.com
Child Base
Established in 1989, the firm provides childcare services in 32 centres around the country, employees currently hold 36 per cent of the shares (30 per cent in Trust, the remainder directly). The Trust is in the process of acquiring a further 20 per cent of stock from the founding family, transforming the £19 million turnover business into an employee controlled enterprise. See: www.childbase.com
Herga
A switch manufacturer established in 1947, Herga has a turnover of £5 million and is controlled by an employee trust. Over time the Trust, of which the employees are beneficiaries, is acquiring more of the firm. Based in Bury St Edmunds, it provides 155 jobs to the local community. See: www.herga.com
John Lewis Partnership
Still the oldest and biggest CoCo firm in the country, the John Lewis Partnership retail firm was established in 1864. It is entirely owned by an employee trust, with employees of John Lewis and Waitrose – “partners” – numbering 65,000 and a turnover of over £5 billion. See: www.johnlewispartnership.co.uk
Loch Fyne Oysters
An important West Coast employer, Loch Fyne Oysters has 120 staff, who own most of the firm, through a mix of a controlling employee trust and directly-held shares. The company supplies seafood, meat and game. See: www.lochfyne.com
Make
Established in 2004, this architecture practice has a turnover of £12 million – up sixfold since its first year of trading. It is now home to more than a hundred professionals in central London, and every one is a member of the employee trust which wholly owns the company. See: www.makearchitects.com
St. Luke's Communications Group
Established in 1995 and now employing 80 staff in two agencies: St Luke’s offering brand strategy and advertising services; and The Nest providing design. An employee owned group, managed by an employee trust. See: www.stlukes.co.uk
Scott Bader
Six hundred employees at Scott Bader manufacture polymers for the international market. Based near Wellingborough, it has plants around the world, including Croatia France, United Arab Emirates and South Africa. Turnover is around £150 million. Staff are encouraged to become members of the charitable trust which wholly owns the company. See: www.scottbader.com
Sunderland Home Care Associates
Employees in this care provider – established in 1994 - own the majority stake, with an employee trust holding a controlling share and the bulk of the remainder in employees’ hands. Turnover is £1.75 million, and staff numbers are around 175. See: www.sunderlandhomecare.co.uk
(Note: Data from Employee Ownership Association database, November 2006: see individual company website for up-to-date information).
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admin
631 Posts |
Posted - 22 Aug 2007 : 09:07:23
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Conference on Maximising the Co-ownership Effect
The UK Employee Ownership Association’s one-day conference on 2nd October, 2007 will be at Birmingham International NEC.
The Conference topic is Harnessing Co-ownership to Improve Business Performance.
You can download conference brochure at:
http://www.employeeownership.co.uk/events.asp
This will be a compelling event for front line leaders, senior executives and selected representatives in co-owned companies; and for business advisers, academic experts consultancies and co-operative bodies.
• In-depth, value adding case study experience – speakers and companies have been selected to provide a diverse mix of real-life case studies designed to help you improve your business
• Time for questions, discussion and feedback – separate topic ‘Strands’ enable selection of the sessions of most value, and time for genuine dialogue with speakers and between delegates
• Productive networking – EOA events are popular and well attended. The EOA network is large and growing, so the day will offer valuable networking opportunities
• Value for money – nine sessions, 21 speakers, and a prestigious venue superbly situated for road, rail and air links - at a fraction of the price of many comparable events
The Employee Ownership Association (UK) reports:
• Co-owned firms make up 2% of the UK economy (20 billion pounds - or A$50 billion - in turnover).
• Companies that share profits with workers have a 19% productivity dividend.
• Profit sharing with workers boosts share values by 9.79%.
• The Employee Ownership Index in the UK has consistently outperformed the FTSE All Share.
• In the US, favourable tax treatment means that 10,000 companies have some form of employee ownership, 85% are unlisted.
• In a UK survey of co-owned firms, 72% say staff work harder, 81% say staff take on more responsibility, 49% see more competitiveness, and 44% say profits are higher.
Source: Employee Ownership Association, UK.
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admin
631 Posts |
Posted - 25 Aug 2007 : 02:53:07
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The staff dreams are made of
From: The Australian Financial Review, 21st August, 2007.
Looking after your workers has clear benefits for British retailer John Lewis writes Fiona Smith.
The John Lewis chain in Britain defies all the cliches of collective ownership. You may imagine Soviet-Style service, a creaky old bureaucracy and any profits swallowed up by rorts and inefficiencies.
What you get instead are operating profits of £354 million ($877 million) — up 26 per cent since last year — and a slew of awards for the quality of its service.
And staff have never gone on strike in the 18 years since John Spedan Lewis put the company into
a trust (and then worked on, six days week without pay, for 26 years)
All staff are known as partners and own the business (while they are employed) through the John Lewis Partnership, which operates 26 department stores, 183 Waitrose supermarkets, an online retailer and a direct services company selling financial, travel and leisure services.
The bureaucracy is there, but according to spokesman Sam Hinton-Smith, it doesn’t stop the company from making hard decisions or relatively fast ones.
“We are a dynamic business and we can make important, strategic decisions in a timely manner,” he says, citing the purchase of an interest in an online grocery, and plans to build 11 department stores in the next decade.
Tough decisions can mean putting people out of work — dicey when they are the owners.
Last year, the partnership decided to close its Caleys store in Windsor.
“It had traded at a loss for a number of years,” Hinton-Smith says. “But the partners were able to ask whether it was the right decision, whether the figures stacked up; and, when they closed the store, all but two of the 130 partners had found new positions either within the partnership or elsewhere. However, if a proposal from the executive team doesn’t have the support of the partners, it is not going to happen.”
The company is run by a board of 12— five of whom are elected by staff every two years. Commercial decisions are taken by the non-elected directors, and the staff appointed ones act as a check, sometimes knocking back the executives’ proposals
“Their role is to act as a sounding board and to provide the link between partners on the shop floor and the board and chairman and the executive team,” Hinton-Smith says.
Then there is the 80 person partnership council, which meets four times a year to discuss issues and question the chairman and executive directors. There are also branch councils at each store. Hinton-Smith says one of the strengths of the model is that decisions can be made for the long term. He says the profits of the past year are the result of investments made five to 10 years ago.
The benefits for partners are numerous. Last year, each one received the equivalent of nine weeks’ pay as part of a profit-sharing scheme.
The firm is also one of the few left in Britain to have a pension scheme that does not require employees to pay into it.
There are also staff discounts, subsidised dining, four employee-owned resorts, yachts for their pleasure and social clubs.
It is also the policy to pay at least the top market rate for salaries.
The relatively low staff turnover (in a high turnover industry) reflects that the employees are happy.
Hinton-Smith says turnover is 25-30 per cent at Waitrose and 20-25 per cent in John Lewis. The industry is struggling with average staff turnover of about 50 per cent each year and replacement
costs of about £2000 to £9000 per person.
As far as customers are concerned John Lewis is onto something. The department stores and the Waitrose supermarkets have dominated the first and second pIaces in industry rankings in recent years, Hinton-Smith says.
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admin
631 Posts |
Posted - 27 Sep 2007 : 03:08:05
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Workers enjoy fruits of their labour
Firms owned by staff have beaten the FTSE all-share. So why aren't there more?
By Antoinette Odoi, The Guardian, Monday August 20, 2007
Imagine working for a company that provides heavily subsidised hotel accommodation in Dorset's Brownsea Castle and discounts of up to 50% on theatre tickets. But much better than that, it makes you a partner, entitling you to a share of the profits.
This is a reality for thousands of John Lewis partners, who received an 18% bonus this year, equivalent to nine weeks' full pay. This year profit before tax at the partnership was £319m, with £164m being reinvested. The rest, £155m, was shared between the partners.
John Lewis Partnership is probably the best known successful employee-owned company. Its 68,000 permanent staff own its 26 John Lewis department stores, 185 Waitrose supermarkets, online catalogue John Lewis Direct, three production units, a farm and Greenbee, a tickets, travel and insurance service. The whole group had a combined turnover of nearly £6bn last year.
Despite its success, employee-owned companies are only slowly emerging as a credible business model.
Data from Equity Incentives, a company providing a share plan service to private and quoted companies, reveals the monetary benefits. It set up an employee ownership index in 1992 to see if employee-owned companies could outperform the average quoted company. It shows £100 invested in the index would have been worth £349 by the end of June 2003; the same £100 invested in the FTSE all-share index would only have grown to £161.
The Employee Ownership Association carried out a survey in 2005 that revealed that 72% thought staff worked harder under a co-ownership structure, 81% said they took more responsibility, 49% thought competitiveness was enhanced and 44% confirmed profits were higher.
Despite this, co-owned companies make up only an estimated 2% of the economy, or £25bn in annual turnover. But Patrick Burns, executive director, sees a strong case for them.
Extra mile
"You get a remarkable level of employee involvement and people are prepared to go the extra mile. People feel their companies are more productive, and the companies are very sustainable," he says.
Director of personnel at the John Lewis Partnership, Tracey Killen, says: "The great strength of the partnership's model is that employees have a real stake in the business ... co-ownership allows the partnership to take a long-term view, because we do not have to answer to external shareholders who are usually seeking quick returns."
A John Lewis spokesman adds: "In the 1990s, performance was quite sluggish. If we were a listed company shareholders would have been asking questions. We invested a lot of money ... but we didn't see the consequences until four, five, six years down the line."
The investment seems to have worked. John Lewis has come first in the Which? survey of the nation's favourite retailers. It has now made a £500m investment in 11 new stores to be built within 10 years.
Loch Fyne Oysters is another example. The company (separate from the Loch Fyne restaurant chain, which was sold to Greene King for £68m last week) turns over £10m a year. It was bought by more than 100 staff in 2003 after they borrowed £2m from the Baxi Partnership, an organisation which helps business become employee-owned through a trust structure, and about £1m from the Royal Bank of Scotland.
Virginia Sumsion, marketing manager at Loch Fyne Oysters, says co-ownership "gives employees a sense of security" but the system requires participation which has not always been easy.
"[Co-ownership] ... means [middle management] has to get employees more involved. In the early stages it's quite difficult to know what to ask." But after the teething problems, she says, "now the culture of the company has become more open".
Fig leaf
Mark Constantine, chief executive of Lush, the natural cosmetics shop, is considering co-ownership. While he stresses the idea is still in the embryonic stage, he wants the 5,500 employees who have contributed to Lush, which has a turnover of £145m a year, to get something back.
He says one reason would be to prevent a buyout from a company that doesn't share Lush's ethics, including its stance against animal testing, but merely wants it as an "ethical fig leaf". "If a business goes public it has to consider its shareholders above all else. I realise the people you [can] trust most are your own staff."
Shared ownership has its critics. Some doubt the ability to make the right decisions and make them quickly, and the level of risk that can be taken with so many people dependent.
But Mr Burns counters: "It's true that some companies do find it difficult to make decisions, but it's a misconception that everybody has to be consulted to make every single decision."
Mr Constantine also dismisses the worries: "Decision-making can become slow at any time. It's about the quality of the management."
But if the benefits are so clear, why is co-ownership not more widespread?
Jonathan Bland, chief executive of the Social Enterprise Coalition, says Britain has a very "thin" model of business. The reality, he says, is that there are "a range of fantastic business models but a real ignorance about the fact we can use them and be successful".
Mr Burns lays some of the blame on business advisers. "Owners looking to sell their business will hardly ever be advised to sell to their own employees. Very few are aware this option is there."
When Gordon Brown scrapped tax relief on company contributions to employee benefit trusts in 2003 it made it more difficult for companies to be trust-owned, he says.
"It was really aimed at tax-avoiders, and [the government] threw out the baby with the bathwater."
John Alexander, managing director of the Baxi Partnership, agrees. Having been in operation for seven years and helped eight companies with 700 staff become employee-owned, he feels employee-ownership could be given a boost if the government brought in "capital gains tax relaxation for anyone who sells into a co-owned structure".
"If there were a nil-rate band for businesses transferred into a co-owned structure, " he says, "it would be brought to the attention of every single accountant and lawyer in the country."
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admin
631 Posts |
Posted - 27 Sep 2007 : 03:10:33
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Case Studies
Wilkin & Sons
Jam-maker Wilkin & Sons shows that adopting an employee-ownership structure does not mean sacrificing good organisation and profit.
Businesses that have adopted ownership schemes involving their employees benefit from staff loyalty and improved work ethic.
Twenty-five years ago, the business behind Tiptree conserves changed its structure and now its 240 employees hold just under 50% of the 122-year-old company via an employee benefit trust. The rest is owned by the founding family members and some minority shareholders.
The company distributes shares annually according to length of service to everyone from the director to the assistants on the shopfloor. When workers retire, Wilkin buys their shares back and redistributes them among the rest of the employees.
Tim Came, Wilkin's sales and marketing manager, says: "We didn't want a predator to approach the business, asset-strip, close the factory and take it elsewhere without regard for the family's work here for generations."
Peter Wilkin, great grandson of the founder Arthur Charles Wilkin, is maintaining the family's interest in the business as chairman and joint managing director. The firm last year had a turnover of £16.5m.
It has also diversified and responded to market demands, introducing its organic Christmas pudding in 1999 and organic chilli mustard in 2003.
Sunderland Home Care Associates
Sunderland Home Care Associates began in 1994 when Margaret Elliot decided to set up a group in the Sunderland area that would provide personal care services to people in their own homes.
"I saw an ad in the local paper for expressions of interest to provide home care and applied," she says. Social services gave the company an initial £50,000 but the company has operated independently since then, and now the Sunderland branch has an annual turnover of £1.8m. The company, which bids for contracts from local social services organisations, has 200 staff in Sunderland and has expanded with operations in North Tyneside, Newcastle and Manchester.
The original Sunderland operation became employee-owned in 2002 because Mrs Elliott felt that giving employees a financial stake would ensure the highest standard of care.
Shares are issued annually to be held for a minimum of five years, but no employee can own more than 2% of the business.
Other co-ownership firms:
Arup Group (100% owned in trust): a global design and business consulting firm. The group has 19 UK offices with 2,500-3,000 staff in Britain, in addition to 9,000 staff working in more than 37 countries. It became employee-owned in 1979.
Compton Fundraising Consultants (wholly owned): group of fundraising consultancies catering for not-for-profit organisations. It was founded more than 40 years ago and has always been employee-owned but to varying degrees.
St Luke's (wholly owned): advertising and communications company bought by its employees in 1995. It has about 60 employees.
School Trends (100% owned in trust): focusing on the supply of school uniforms, it was set up in 1988 and moved to employee ownership status in 2004. It has approximately 150 employees.
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admin
631 Posts |
Posted - 12 Oct 2007 : 05:42:50
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A trade unionist in the world of employee ownership
David Wheatcroft is a British trade unionist and an experienced practitioner in the employee ownership field. He has just published a new paper: "Caring and sharing – the co-owned route to better care", a personal account of how an employee owned company – Sunderland Home Care Associates – was formed and has flourished. Of course such company is not listed – the paper tells how a regulated internal share market is used for employees who wish to sell or buy shares. Another aim of this report is to show national and local policy makers why the co-ownership model has so much to offer public services.
The following is the press release issued by The Employee Ownership Association UK upon the publication of this report. You can view the full report at: http://www.employeeownership.co.uk/press.asp .
Staff owners transform North East home care standards
Paper praises dedication to elder care by staff co-owners and visionary founder
An award winning employee owned North East home care company has won praise from one of the region’s MPs for offering elderly people “superlative client care and a level of personal development for staff matched by few other organisations in any sector”, in a paper launched today at Newcastle’s Centre for Life [Wednesday 12 September].
In a foreword to the ‘Sharing and Caring’ paper published by the Employee Ownership Association, North West Durham MP Hilary Armstrong claims that “poverty of aspiration is a particular problem faced in the North East of England” after what she terms “brutal mismanagement” of economic restructuring in the 1980s. But the “dynamic” home care enterprise founded by Margaret Elliott, Ms Armstrong says, is a model of the “enterprising spirit, talent and potential” the region needs and of “changing society for the better”.
Written by one of the company’s advisers, Dave Wheatcroft, ‘Caring and Sharing’ tells how Margaret Elliott and her co-workers built Care & Share Associates [CASA], around the founding enterprise Sunderland Home Care, and parallel worker-owned agencies in North Tyneside, Newcastle and Manchester.
The paper notes that the company won the prestigious Social Enterprise of the Year award in the same week in October 2006 that the Commission for Social Care Inspection’s ‘Time to Care’ report condemned much elderly home care in the UK, though it praised Sunderland Home Care as an example of good practice.
According to Dave Wheatcroft, the company has been:
• Good for the cared-for clients’ well-being because it allows them to stay in their homes for much longer instead of having to opt for residential care
• Good for the community and local economy because it’s more expensive to place people in care homes than allow them to continue living at home in their own environment
• Good for employment in that it provides meaningful jobs for people who live in an area of high unemployment and deprivation
• Not least, good for the employees themselves in terms of a second source of income through share ownership, plus self-esteem, confidence and career development
MORE
Describing the paper as a tribute to the “dedication and single mindedness of the main character, Margaret Elliott”, the author traces the company’s origins, first as a community shop, then [after a study visit to home care co-operatives in New York] a co-op, and finally a fully fledged business owned by its own staff.
In a message to national and local policy makers, the paper says the company’s example shows that co-ownership is “exceptionally good at creating the combination of dedication, skill and care that users of public services are entitled to expect”.
ENDS
Notes for Editors
‘Caring & Sharing: the co-owned route to better care’, by Dave Wheatcroft, is launched at a Reception at Newcastle’s Centre for Life at 3pm on Wednesday 12 September 2007. Launch sponsored by Social Enterprise Sunderland.
Speakers at the reception are:
• Dave Routledge, Director with Newcastle-based Eaga plc
• Dave Wheatcroft, Author, ‘Caring and Sharing’
• Tim Pain, Head of Enterprise & Business Support, One North East
• Sue White, Head of Social Enterprise, Department of Health
• Margaret Elliott, Founder and Director, Sunderland Home Care
The Employee Ownership Association is a network of companies largely or wholly owned by employees. Formed in 1979, its members include the John Lewis Partnership, Arup Group, Unipart Group, Sunderland Home Care, two other home care companies, and a wide range of other businesses.
The paper includes a Foreword by Rt Hon Hilary Armstrong, MP for North West Durham.
‘Caring & Sharing’ is available to download free from Wednesday 12 September 2007 on the Employee Ownership Association website at www.employeeownership.co.uk
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admin
631 Posts |
Posted - 30 May 2008 : 12:29:33
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Share Value: how employee ownership is changing the face of business
The All Party Parliamentary Group on Employee Ownership in the UK has just released its report (May, 2007) on its Inquiry into employee ownership in the UK. The report is called Share Value: how employee ownership is changing the face of business.
This is a key document that will be of great importance to employee ownership advocacy groups in Australia. The report can be accessed at: http://www.employeeownership.co.uk/publications.asp
This report is published by the All Party Parliamentary Group on employee ownership, which the Employee Ownership Association UK sponsors, and follows their inquiry into the contribution of the co-owned business sector to the economy. Based on 41 written submissions and three oral hearings, the report concludes that this £25 billion sector ‘offers enormous potential for the UK economy’. The report analyses how co-owned companies achieve exceptional performance and makes a wide range of policy recommendations for how Government and others can remove barriers to the sector’s growth.
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admin
631 Posts |
Posted - 29 Nov 2008 : 05:33:43
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U.K. Parliamentary Group Urges More Support for Employee Ownership
The U.K. All Party Parliamentary Group on Employee Ownership is a forum of 78 members of both houses of parliament from all three parties. During 2007, it held a series of hearings on the "co-owned" model for business ownership (worker cooperatives, ESOPs, employee stock purchase plans, and other arrangements). It concluded that "co-owned firms appear adept at managing innovation and change, are underpinned by very high levels of productive employee engagement, and have an excellent track record in delivering broader social, environmental, and community benefit."
The group urged several legislative reforms, including tightening rules for employee trusts, and allowing (but not requiring) companies to set up the plans so that the shares are held in permanent trusts (much like U.S. ESOPs). Current law allows employees to take the shares out any time, but provides tax incentives to hold the shares for three, or in some cases five, years.
The group also urged improving tax incentives for Save as You Earn (SAYE) plans relative to share option plans. SAYE plans are similar to U.S. employee stock purchase plans, but allow the deferred income to be held longer and accumulate interest if not used to buy shares at the end of the offering period. Option plans have some tax benefits, but do not, like SAYE plans, have to be available on a non-discriminatory basis.
The report 'Share Value: How Employee Ownership is Changing the Face of Business," is available at www.emptoyeeownership.co.uk/publications.asp .
From: The Employee Ownership Report, NCEO US, September/October, 2008.
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admin
631 Posts |
Posted - 15 Jan 2009 : 03:57:30
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Innovation included: why co-owned businesses are good for public services
From: The Employee Ownership Association, UK.
Written by internationally acclaimed business writer Charlie Leadbeater, Innovation Included makes the case for more public services to be provided by co-owned companies. Sponsored by eaga plc, the paper claims that employee owned companies offer public services a level of employee commitment and innovation that can transform the experience of service users. The author calls for a political initiative to build capacity, demand and awareness for more co-owned public service provision. Author: Charlie Leadbeater. Published: November 2008. Foreword: John Clough MBE.
To access the full report, go to: http://www.employeeownership.co.uk/publications.asp
The following is an extract from the report (page 6):
"The public sector would benefit enormously from having more co-owned businesses to add to the diversity of organisations providing public service. The public sector is searching for a new story of modernisation and renewal. Centralised and target driven approaches to public service improvement can create significant downsides in terms of low morale, limited initiative and innovation. That is why politicians and policy-makers are searching for less bureaucratic, more localised, and customer-centric forms of organisation, that are able to respond more directly and creatively to people’s needs. Most proposals have focussed on schemes to decentralise and localise services, giving communities greater say in how services are designed and delivered, and parallel plans to personalise services, for example, through the spread of individual budgets and self-directed services.
Co-owned public service organisations can provide the missing ingredient in this process of renewal: to motivate staff to improve customer service by giving them a clear stake in the process of transformation.
Staff in co-owned public service organisations frequently say they are willing and able to “go the extra mile” to deliver a better service for people. The public sector will need more of that spirit. That is why promoting greater co-ownership should be a strategic priority for the next phase of public service renewal."
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admin
631 Posts |
Posted - 31 Jan 2009 : 05:26:51
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DEVELOPING CRITERIA FOR A BETTER LEGAL FRAMEWORK – THE POSITION IN OTHER JURISDICTIONS
From: 'Employee Share Ownership in Unlisted Entities: Objectives, Current Practices and Regulatory Reform' by Ann O'Connell, pages 33 to 35. This report is part of the Employee Share Ownership Research Project at the Melbourne Law School, University of Melbourne and was published in December, 2008. The full report may be accessed at:
http://cclsr.law.unimelb.edu.au/index.cfm?objectid=A9840D89-1422-207C-BA2319347B2EE439
"The position in the UK appears to be a more favourable regulatory regime than in Australia, both in relation to corporate and also tax requirements. The UK position is considered below.
United Kingdom
The European Union (EU) Prospectus Directive requires any company offering shares to the public in the EU to issue a prospectus which complies with the rules issued by the relevant member state. The Financial Services and Markets Act 2000 (UK) (as amended in 2005) provides for a number of exemptions from the requirement to produce a prospectus. One such exemption is for securities offered to employees but only if the securities are listed. Another exemption is where the offer is made to fewer than 100 persons. It has also been suggested that an offer of options to existing employees would not amount to a public offer and so would not require a prospectus. If the exemption for listed securities applies there is a requirement to produce a document containing information on the number and nature of the shares and reasons for and details of the offer. If the offer is otherwise exempt there does not appear to be any requirement to produce a simpler version of information to assist employees to decide whether to take up shares or not.
The UK tax legislation recognises a number of schemes that encourage employee ownership by providing a number of tax advantages. The four types of schemes are:
• Share Incentive Plans (SIPs);
• Company Share Option Plans (CSOPs)
• Save As You Earn schemes (SAYE); and
• Enterprise Management Incentive schemes (EMI).
Share Incentive Plans (SIPs) offer shares rather than options and, provided certain rules are met, offer considerable tax advantages. Employers may offer shares worth up to £3000 in any tax year (“Free Shares”) and employees may also purchase shares with contributions from salary of up to £1500 per annum (or 10% of salary if less) (”Partnership Shares”). If an employee does acquire
Partnership Shares, the company can award additional free shares (“Matching Shares”) at a ratio of up to 2:1. The maximum share value that can be acquired by an employee in this way is therefore £7500 per year. Additionally, a participant can receive shares in lieu of cash dividends that he or she already holds in the Plan up to an annual limit of £1500. The shares must be ordinary shares in the employer or a related company but this can include non-voting shares. All shares are held in a trust for a minimum three year period. After this period if the shares are released, tax will be payable on the lower of the value at that time or when allocated/purchased. Any subsequent increase in value is taxed as a capital gain, with the benefit of available relief. In an unlisted company, the value of the shares must be agreed with HM Revenue and Customs.
In a Company Share Option Plan (CSOP) employees may be granted, selectively, options to acquire shares with an aggregate value of £30,000 each. If the options are granted with an exercise price less than market value, income tax is payable in the year the options are granted. If the exercise price is at least equal to market value, no tax is payable on grant and if the options are exercised after three years, no income tax is payable on exercise of the option or on the sale of the shares acquired. Gains on the sale of shares acquired will be subject to capital gains tax but concessions may apply. For unlisted companies, market value is negotiated with HM Revenue and Customs.
Under an approved SAYE Share Option Scheme, employees agree to save up to £250 per month with a bank or building society. They receive tax-free bonuses after fixed periods of 3, 5 or 7 years. The company also grants employees the option to use the proceeds of their SAYE schemes to purchase company shares when their savings contracts mature. The option must be exercised within 6 months of the maturity of the savings contract. All employees with a minimum length of service (which can be set at a maximum of 5 years) must be invited to participate, except for those interested (broadly speaking) in more than 25% of the share capital. The exercise price at which company share options can be granted may be up to 20 per cent less than the agreed market value of the shares at the time of grant. This “locks in” an immediate substantial gain for the employee, free of all income tax or national insurance, even before the SAYE contract has begun. No income tax is payable when the share options are granted, when they are exercised, or when the shares are sold. As with other approved share schemes, there is a potential liability to capital gains tax, but concessions may apply.
Enterprise Management Incentive schemes (EMI) permit certain companies to offer options over shares with a market value of up to £100,000 at the date of grant, to any number of employees, subject to a maximum share value of £3 million under option at any one time. Companies offering EMI options must be independent, that is not owned by any other company and certain business activities are excluded – dealing in commodities or securities, financial activities, legal and accounting services, property development, hotels and nursing homes.
If EMI options are granted with an exercise price less than fair value, income tax is payable but not until the option is exercised. The amount on which tax will be payable is the difference between the exercise price and the lower of the market value at the date of exercise or at the date of grant. On the sale of the shares acquired, gains will be taxed as capital gains, but concessions may apply. The fair value of shares at the date of grant and market value must be agreed with HM Revenue and Customs.
It is also possible in the UK to issue options that do not comply with any of these schemes. The advantage is that the employer does not have to comply with the rules and regulations that apply to statutory schemes. All gains on the grant of such options to employees will be subject to income tax (and national insurance contributions) but the tax is deferred until the option is exercised."
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admin
631 Posts |
Posted - 13 Mar 2009 : 09:49:08
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Making employee ownership work: a benchmark guide
'Making employee ownership work’ is a new guide from the Employee Ownership Association (EOA) UK and co-ownership advisers the Baxi Partnership, based on a survey of 25 EOA member companies including John Lewis, Unipart, Arup and Mott MacDonald. Designed for easy reference, the guide compares company practice under five headings: employee engagement, management systems and reward, governance and employee voice, employee ownership culture, and ethics and social responsibility.
The author of the report is Sarah Silcox. It was published in February 2009 and can be accessed at: http://www.employeeownership.co.uk/publications.asp
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admin
631 Posts |
Posted - 02 Apr 2009 : 04:10:05
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Structuring employee ownership – a guide to trusts, shares and tax help for co-ownership
This guide is for co-owned companies and businesses considering a transfer to minority or majority employee ownership. It aims to help companies optimise their co-ownership structure. Designed to be clear and practical, the guide provides expert guidance on employee trusts, individual share schemes, combined trust and share schemes, share option plans and key tax advantages.
The author of the report is Robert Postlethwaite and it was published in March 2009. It can be accessed at: http://www.employeeownership.co.uk/publications.asp.
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admin
631 Posts |
Posted - 01 Jun 2009 : 09:15:37
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UK Employee Ownership Index May 2009
Shares of Employee owned companies outperform FTSE All-Share in first quarter of 2009
Employee owned companies outperformed the FTSE All-Share in the first quarter of 2009 according to the UK Employee Ownership Index (EOI) published by law firm, Field Fisher Waterhouse LLP.
Employee owned companies' share prices were down 2.4%, performing significantly better than the FTSE All Share companies' share prices which were down 10.2% in the quarter.
The EOI, compiled by the firm's Equity Incentives team, monitors the share price performance of listed companies, comparing the performance of FTSE All-Share companies with companies that are over 10% owned by employees.
In the last quarter of 2008, employee owned companies underperformed, however, in the long term employee owned companies continue to outperform FTSE All-Share companies.
The EOI started in 1992 and shows that over 17 years, employee owned companies have outperformed FTSE All-Share companies each year by on average 10%. Over successive three year periods they have outperformed by 41% and over successive five year periods by 78%.
An investment of £100 in 1992 would at the end of March 2009 have been worth £442, while the same investment in the FTSE All-Share Index would be worth £161.
Possible reasons for the improved performance of employee owned companies include higher employee engagement, higher standards of governance and conservatism in relation to growth strategies.
Graeme Nuttal, head of the Equity Incentives team at Field Fisher Waterhouse says:
"The EOI shows that in the last quarter, employee owned companies performed better than the FTSE All-Share – a trend that becomes more pronounced when we look at performance over longer periods of time. Although we see variations in relative performance from quarter to quarter, the EOI demonstrates that in the long term employee owned companies do better, proving to be more resilient than FTSE All-Share companies."
The Equity Incentives team at Field Fisher Waterhouse produces quarterly reports on EOI performance and advises on employee ownership solutions for a variety of business structures as well as in incentive plans for UK and overseas listed and private companies. They have had detailed and broad ranging input into Government share plans policy.
From: http://info.ffw.com/ve/ZZ6570rPC9961WIm679
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admin
631 Posts |
Posted - 11 Jul 2009 : 06:10:03
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From Colleagues to Owners
‘From Colleagues to Owners’ is an Employee Ownership Association UK paper on how and why companies make the transition to employee ownership. Based on ten case studies, the report explains what motivated a highly diverse mix of businesses to consider employee ownership as a succession or start up route.
Sponsored by co-owned Child Base, whose chief executive writes the report’s foreword, ‘From Colleagues to Owners’ received a Parliamentary launch sponsored by co-ownership advisers the Baxi Partnership.
Author: Andrew Bibby. Published: April 2009.
The report can be accessed at: http://www.employeeownership.co.uk/publications.asp
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admin
631 Posts |
Posted - 06 Oct 2009 : 13:08:46
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Re-Inventing the Firm: We have a once in a lifetime chance to renew our idea of what the company is for...
A Research Report by William Davies for Demos, August, 2009.
The financial crisis has called into question many of our core assumptions about economic structures, governance and institutions. But there has been little attention paid to the basic unit of economic collaboration and production: the firm. In recent decades, Britain developed a corporate monoculture in which the 'shareholder value' creed treated firms simply as the property of their shareholders, to be traded exploited and disposed of in pursuit of profit.
Government policy making has done little to call this culture into question, depriving our economy of a richer vision of what a good company is and what it can do. This crisis is a chance to ask deep questions about our firms: how can they meet social and political as well as economic goals? How can firms be modelled so that not only shareholders but employees, the economy and society profit?
Many of these models already exist. Mutual and employee-owned models of business operate with longer time-horizons, achieving higher levels of performance and customer satisfaction. They nurture greater power for individuals over their economic lives and increase the accountability of managers.
This report argues it is time to bring these models out of the wilderness and into debate about where capitalism goes next. Presenting a wide range of quantitaive data alongside three new case studies of employee-owned firms, it offers a new vision of economic autonomy where democratic companies drive a happier and more sustainable economy.
You can access the full report at: http://www.demos.co.uk/publications/reinventing-the-firm
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admin
631 Posts |
Posted - 09 Jan 2010 : 12:20:21
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Commission on ownership
“Enterprises owned by staff or communities should deliver more public services” , Tessa Jowell, Minister for the Cabinet Office said in a speech to the think-tank Progress.
She claimed that after the credit crunch and the expenses scandal, people were now looking for different types of organisations that give them a greater sense of ownership and control.
She argued that we are entering “mutual moment”, where a new sense of community ownership would be created through making greater use of mutual organisations in the provision of public services.
Ms Jowell announced the launch of an independent Commission on Ownership, chaired by economist Will Hutton and funded by Co-operative Financial Services, to look at how to get more employee and community ownership into public services.
The minister urged the Commission to encourage a level playing field for mutuals to run public services and extend the right of ownership to communities.
From: 'it's our business', newspad of the UK ESOP Centre, January, 2010.
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admin
631 Posts |
Posted - 06 Feb 2010 : 16:33:01
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British Conservative Shadow Health Minister Proposes Employee Ownership in National Health Service; Other Parties Agree
British Conservative party shadow health secretary Andrew Lansley has proposed that the country's National Health Service would be recreated under a Conservative government along the lines of the employee-owned John Lewis Partnership, one of the largest retail operations in the U.K. Britain will have elections in the next several months, and the Conservatives currently are well ahead in the polls.
In response, both the Labour Party and Liberal/Democratic Party said they too would favor a version of the plan, and extend it to other services, such as schools, as well. The Labour plan would also include local communities and nonprofit groups.
Article from: The Employee Ownership Report, January/February, 2010. NCEO (US) www.nceo.org.
For the British Labour Party's policy on this, go to: http://www.guardian.co.uk/society/2009/nov/11/labour-manifesto-public-services-sector .
For a useful UK research report on the topic, see NHS Mutual. This report was funded and published by the Nuffield Trust. The report is a study into the scope for engaging and motivating health service staff using employee ownership and other social ownership models. The report, on which UK Employee Ownership Association advised, concludes that employee ownership of the kind pioneered by Central Surrey Health has a valuable role to play but needs support from policy makers. Publisher: Nuffield Trust. Authors: Professor Chris Ham and Dr Jo Ellins. Published July 2009. The report can be viewed at: http://www.employeeownership.co.uk/publications.asp
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Employee ownership marching ahead in the UK
