April/May/June 2020

Spotlight on Employee Ownership

February saw K-Club hosting its regular breakfast networking event once again at the AJ Bell Stadium in Salford. Following their winning formula of early morning networking, silver service full English breakfast, and two great speakers, the event presented a common theme this time exploring the benefits of Employee Ownership as a business model.

Speaking first was Deb Oxley OBE, CEO of the Employee Ownership Association (EOA). Deb has over 30 years business experience across private and public sectors and latterly after founding and running her own small business for 10 years, joined the EOA in 2012, becoming Chief Executive in 2015. Having recently led a national inquiry into the economic and social effects of employee ownership, Deb is now leading a programme of work to realise the recommendations of the inquiry findings in an EOA report – the Ownership Dividend Report.

As part of her role at the EOA, Deb also chairs the Employee Ownership Sector Group, is a member of the Government Mutuals Advisory Group, a Champion on the Inclusive Economy Partnership and a member of the Managing Partners Forum (MPF). In 2019 she was awarded an OBE for services to employee ownership and social enterprises. For her presentation to the many businesses in attendance, Deb shared her personal journey into the different aspects of employee ownership with a view to raising the profile of the positive aspects of the business model.

To illustrate what employee ownership looks like in practice, the next speaker was Rob Davenport, Chief Executive of Shawston Holdings. Rob’s story is one of developing an early appetite for business and entrepreneurship. After completing 12 years working for two large PLC’s at Director level, he wanted to escape corporate life and chose to risk it all by funding a small management buy-in of a ‘down at heels’ Manchester based distribution business with sales of £750k p.a. and 10 employees.

Today, 18 years on, Shawston International Ltd now operate from 5 depots, sales are approaching £25 million p.a. and the business has 120 co-owner employees. Rob attributes much of his personal and business success to an inclusive and honest approach to both relationships and decision-making. It was a philosophy visible in his move to make Shawston a fully employee owned business, having implemented a (minority) direct share ownership model in 2015. In recent years, and on the back of some incredibly challenging but successful cultural changes within Shawston, Rob has contributed to the EOA’s Ownership Dividend Report led by Baroness Sharon Bowles and has been a speaker at the Employee Ownership Association’s annual conference.

Further information on employee ownership is available on the EOA website – employeeownership.co.uk – and the following overview is taken from the site:

Employee Ownership
Employee owned businesses are totally or significantly owned by their employees. The economic contribution of employee ownership in the UK is significant and is growing. Employee ownership delivers 4% of UK GDP annually. Employee owned businesses achieve higher productivity and greater levels of innovation and are more resilient to economic turbulence. They also have more engaged, more fulfilled and less stressed workforces.

Employee ownership can take one of three forms:
Direct employee ownership – using one or more tax advantaged share plans, employees become registered individual shareholders of a majority of the shares in their company;
Indirect employee ownership – shares are held collectively on behalf of employees, normally through an employee trust;
Combined direct and indirect ownership – a combination of individual and collective share ownership.

Employee ownership typically happens in one of the following scenarios:

Business succession or ownership succession
Private owners, such as an entrepreneur or family business, decide to sell to their workforce. The most typical route into employee ownership.
Growth and Expansion
Partners, owners, or managers might decide to broaden ownership to cover most or all employees, reflecting the need to attract, retain and motivate talented people.
Public Service Spin-Outs
Sometimes called mutuals, these newly created businesses including social enterprises and community interest companies delivering public services may choose an employee led or owned solution as part of their structure.
Start Ups
The founder of a business opts for employee ownership at the outset of the business or later.

Please keep checking the website keystone-gb.com for up to date information on the next K-Club event. Tickets are available through Eventbrite. For further information please contact Amanda Manson, Events Organiser on 07754 069 829 email amanda.manson@k-club.co.uk