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EFES NEWSLETTER - JULY 2023
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The
new employee-owners at High Speed Training Company,
UK
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Collective
employee ownership - the unstoppable rise
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While
individual employee share ownership is more common in
large companies, collective employee ownership works
better for SMEs.
By owning shares individually, employees invest their
savings in company shares. Large companies are, of course,
used to offering their shares to the public. For employees,
the shares are often offered on advantageous terms,
in the form of a reduced price or a company contribution.
In SMEs, it's a completely different story. Issuing
of new shares is rare. Rather, ownership changes only
in very specific circumstances: business transfers,
when the managing owner wants to retire. We're not talking
about a few shares, but the whole company. The sums
involved are much larger. This is not something an individual
employee can take on. On the other hand, it's perfect
for collective employee ownership.
The collective ownership approach avoids the need for
employees to invest, risk their own savings or go into
debt. Financing comes from outside, in the form of credit,
and employees do not bear the risk.
In the Anglo-Saxon world, trusts are used as the legal
vehicle for organising this effectively. In the United
States, they have used the Employee Stock Ownership
Plan (ESOP) plan since 1974. In the UK, the Employee
Ownership Trust option is becoming increasingly
popular. Unstoppable.
There are legal vehicles in many European countries
that can be used for the same collective employee ownership
process. Their names vary from country to country: private
foundation, fondation privée, fiducie, stichting administratiekantoor,
Privatstiftung, stiftelse,…
Family ownership has for years been organised across
Europe using these mechanisms. The time has come for
employees to make use of collective ownership via these
vehicles as well.
That will allow for employee ownership to spread throughout
Europe, including to SMEs.
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Press
review
We
have a selection of 24 remarkable articles in 7 countries
in June 2023: Czechia,
France, Italy, Netherlands, Romania, UK, USA.
Czechia:
Government promise.
France: Take inspiration from the SCOP model. The Jean
Jaurès Foundation recommends prohibiting employee share ownership
"pure and simple madness". New employee share plan
for Sanofi, for Veralia. Employee ownership weighs 80% at
GCC Construction. ERES publishes its annual overview of employee
share ownership.
Netherlands: CNV Union recommends the free distribution
of shares to employees. Employee ownership foundations operate
primarily on the basis of share certification.
Romania: Employee share ownership takes off in Romania.
UK: Thanks to the Employee Ownership Trust scheme,
every day a new SME is transferred to employees, this month,
among others, the case of: Cornerstone Veterinary Clinic,
Clean Digital Marketing, Davies+McKerr Consultancy, Mapp Real
Estate, Ainsley Gommon Architects, Leisure Park Internet Solutions.
USA: Business transmission to Employee-Owned Purpose
Trust.
The full press review is available
on:
https://www.efesonline.org/PRESS
REVIEW/2023/June.htm
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A
political roadmap for employee ownership in Europe
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