Prem Sikka, Professor of Accounting at Essex Business School’s Centre for Global Accountability, opened a recent article by reflecting that corporations, such as BHS, are being run entirely in the interests of executives and shareholders, with little concern for anyone else.
Moving away from this model, Labour MP Gareth Thomas, with the support of the Co-operative Party put forward a bill, Profit-sharing and Company Governance (Employees Participation), which proposed to make businesses with 50 or more employees set aside at least 5% of their total profits for staff. Labour leader Jeremy Corbyn was said to have supported the proposal. Read more here.
Visitors to this site sometimes open the worker co-operatives directory which has a few instances of co-ops financed by employee buyouts. On rare occasions, notably the company now known as the Scott Bader Commonwealth, the owner has given the company to its workers. Read more here. The work of the Baxi Partnership should also be mentioned.
Earlier this month, a web search, following news from a colleague who has become Chelsea Green Publishing’s Commissioning Editor for the UK/Europe, led to the news that in 2012 Chelsea Green decided to become an employee-owned company, creating an employee stock ownership plan (ESOP) in which employees control 78% of the company’s privately held stock; the remaining stock is held by the founders.
In 2014 the owners of Outlandish, based in Finsbury Park, gave up their ‘fat cat bonuses’ by giving the business to their employees. The company, which builds next-generation data tools websites for organisations like the BBC and King’s College London, now has an annual turnover of £1million. Co-founder Tamlyn Rhodes said: “Like most knowledge-based companies the value of Outlandish is the people that work for it, not the machines that it owns. If people are creating the value through their hard work and ingenuity, it’s only right that they should get to own what they create.”
Speaking at the re-launch of Outlandish as an employee-owned company Jeremy Corbyn, as MP for Islington North, said: “I welcome and applaud this great local effort to create fulfilling jobs and provide training in Islington and hope that Outlandish’s model can be replicated in many areas.”
Note that on the Political Concern website Professor Sikka argues that the possible demise of retailer BHS draws attention to the need to change the way major corporations are governed.