It was great to see the clear steps outlined by the Wales Co-operative Centre this week to promote employee ownership across the country. Alongside key recommendations around target setting, funding business support, ensuring that advisors and business schools teach employee ownership, and the use of a "wage for equity" model (all sensible recommendations) was also a clear sense of the importance of leadership.
To which we would say an unqualified "yes", but would note that taking a business into employee ownership is not a process that requires a flag-waving, charismatic leader to be saying "I'll lead, you follow". If employee ownership is to become a reality then all employees should be encouraged to participate in the life of the business, to feel they have a stake in it, and, ideally, to have the chance to influence decision making.
Exactly how that influence takes place will vary from business to business, depending on scale, on geography, on a wide range of factors. But it is as important to change culture as it is to change legal structure (and this from a governance lawyer).
Employee ownership is important not just because, if done in the right way, it offers tax breaks to current owners (though this is undoubtedly a positive thing) but also because it shares reward, ownership and influence throughout the workforce. The model of business changes from benefitting a few people, to those benefits becoming collective.
The report rightly notes that in challenging times, this model builds resilience. And goodness knows, we all need some of that right now.
A new white paper published today by the Wales Co-operative Centre has outlined five recommended steps for the next Welsh Government to help double the number of employee-owned businesses in Wales. Findings from the The Ownership Effect Inquiry* found that co-owned companies tend to be more successful, competitive, profitable, and sustainable when compared to SMEs, with strong evidence to suggest that transitioning to employee ownership can be hugely beneficial to business owners and the wider economy.