Every company has to be owned by someone – why not the people working in the business ?
A new UK paper ( http://www.employeeownership.co.uk/publications.asp ) on employee ownership poses this question by Willie Watt of Martin Currie and outlines some amazing improvements in this vital area. The paper examines ten UK businesses who have successfully adopted share plans where employees now own ( directly or indirectly ) equity in the business in which they work. As a tool to fund and implement business succession planning these plans are unmatched in their ability to provide a structured approach to a normally complicated funding issue for most business owners looking at their exit options. The reports matches many of our key concepts in introducing plans and highlights the longer term strategic approach we are fond of when implementing succession based share plans. ” The transfer of a business into employee ownership can very often be a process undertaken over an extended period of time.” The report looks at “concrete examples of how businesses have found the necessary capital to become employee-owned and at the issues involved in this process. ” Unfortunately many advisers still do not see and understand the true benefits of this type of approach – the report mentions banks, accountants and lawyers who all advised against the introduction of employee equity – but the quote from the previous owner of one successfully implemented plan speaks volumes – ” We believe employee ownership is the best way to fund, retain and develop talent.”