A number of articles have appeared recently regarding the response of Deputy Prime Minister of Britain, Nick Clegg, to Graeme Nuttall’s examination of methods to promote employee ownership and spread the benefits of employee ownership to the wider economy.
It’s not enough to talk about a new kind of capitalism: more balanced, more sustainable, fairer. We need to roll up our sleeves and build it – and that is what today is about.
. . .
That’s why today I have announced that an Institute for Employee Ownership will be established, that there will be new off-the-shelf ‘DIY packs’ for companies to adopt the Employee Ownership business model and that we will issue a call for evidence from business and employees on how a right to request could work
The Nuttall Review was published on July 4, 2012 to summarize the existing research on the benefits of employee ownership, identify the key barriers in adopting employee ownership and reccommend ways of overcoming these barriers. The report can be viewed here.
Responding to Nuttall – next steps to a John Lewis economy, Nick Clegg, Cabinet Office
British firms can be saved by employee ownership, says Deputy Prime Minister, Co-operative News
Nick Clegg seeks more employee ownership, BBC News
Nick Clegg to announce new employee ownership institute, The Guardian
Government shows support for employee ownership, Department for Business Innovation & Skill
This interesting article appeared recently on the Economic Intelligence Blog of U.S. News explaining how Employee-Owned businesses are the key to a “more robust and sustainable economy.”
The article focuses on the success of John Lewis Partnership in England. A company that is 100% owned by its 81,000 employees, and boasted a $13.7 billion in 2011 revenues. While remaining profitable during the Great recession, the company also managed to provide fair compensation and give employees control over the business through a “generative ownership” model. U.S. companies likewise benefit from employee ownership, often out performing similar non employee-owned businesses with “lower staff turnover, higher trust, and greater shareholder value.”
The Aspen Institute has posted a paper from the Employee Ownership Association (UK) detailing the benefits of employee owned companies on employees as well as the overall UK economy. While the paper is focused on the impact of employee ownership across the pond, many if its findings echo the US experience. A particular point of convergence is that employee ownership by itself is not enough:
The benefits that can accrue to employees and businesses alike are not a given – they depend on the specific circumstances of employee ownership models, particularly around employee involvement and participation among others…
Also of relevance is the outlook for employee owned companies in a down economy:
Evidence suggests that employee-owned businesses are at least as likely, and in certain circumstances more likely, to survive difficult economic conditions than non-employee owned businesses.
The findings are further evidence of the power of employee ownership.