EO Day 2020 - time for change
Friday 26th June is Employee Ownership Day. Lisa Fryer, Associate, considers how now may be the perfect time for even greater awareness of this business model.
When the June edition of People Management landed and I took a moment to flick through the articles, ‘Remaking Corporate Governance’ caught my eye. So I made a coffee and allowed myself time to take a closer look…
There is no doubt that the current circumstances are having a significant effect on the way that companies are operating. At the beginning of 2020, key questions were centred around how businesses were addressing their environmental impact and supporting positive climate change action. How could UK businesses prepare and adapt to the impact of Brexit and whatever related trade deals were also major concerns?
Within a few short months we’ve experienced global disruption to welfare and economies as a result of Coronavirus. Currently the inequality experienced by all BAME communities has been brought in to sharp focus, with heightened awareness as a result of Covid-19 impact in addition to protests following the deeply disturbing footage of Ahmaud Aubrey and George Floyd.
Those businesses who have responded positively, engaged communities, demonstrated genuine care and concern for their employees and acknowledged their impact on wider society appear to be weathering the storm better. Maybe our fundamental need to be acknowledged as valuable individuals rather than expendable assets has finally come clearly in to focus.
The article explains how corporate investors and boards are aware of ESG (environmental, social and governance) factors. The apparent mentality around ‘pie splitting’ rather than ‘pie growing’ was referenced, with an acknowledged shift towards the latter being increasingly identified, but not mainstream. The roles of HR Directors and NEDs in ensuring recognition and discussion around the changes taking place in society were noted, with a reflection that these discussions more frequently appearing on board agendas. Instead of worrying about how to chop up what was available, the article reports more focus on activities that enable businesses to grow, naturally making more available for everyone. Bonus pay outs for bosses or buying up stock options doesn’t necessarily build business resilience.
I couldn’t fail to notice a couple of quotes picked out in the article. “It will take a long time for people to go back to brands they feel haven’t done the right thing”, and also “If it’s a choice between helping society and boosting profits, it’ll be profits every time”. We should of course all be aware of the role we play in this as consumers.
In my 30+ years of working within the EO community, it’s easy to think that so many would want to undertake business in a positive and ethical way. And yet for me, this article highlighted that so many businesses are yet to identify the benefits of doing the same business in a different way.
Whilst the article covered the changing pressures on boards to adjust their business focus in the current climate, there was little reference to the Employee Ownership model: this introduces a further layer of governance and assurance focused on ethos, community and doing the right thing, even when nobody else is looking.
When you’ve built this in to your business model, it can be so much easier to take those long term decisions. You can tap in to your deeply committed employees, connect with a loyal customer base and communicate innovative change in a positive and future focused way. For good measure, your customers and clients know that you are more likely to be there in the future for them, because you’re not worrying about how much pie you’ve got to split up. You just want to make sure that you can keep on making even more of those beautiful pies long in to the future.
So if you were to ask me what needs to come from the current situation, it would be for the business community to acknowledge that Employee Ownership is not a marginal option or business model for those slightly quirky business owners who want to give something back to their employees. Employee Ownership already has a corporate governance model that addresses a number of the concerns this article has identified. Although we cannot claim these businesses are perfect in this area, there is a far smaller risk of boards misjudging situations when there are Trustees to assure, particularly employee trustees.
Employee ownership is one business model option that helps to address perceived capitalist greed, executive privilege and the endless pursuit of profits at whatever expense. Employee ownership is an opportunity to work and contribute towards something that will enhance others lives for a long time after you’re on the board or a part of the organisation. Employee ownership is the model of business that enables greater engagement and focus around your ultimate purpose, which in turn more effectively supports your immediate community, stakeholders and employees.
So for me the question for EO Day 2020 would be, ‘How can we build resilient and sustainable organisations that we can trust to do the right thing?’
#EOisTheAnswer