Employee-owned businesses urged to become better corporate citizens
10 August 2020 at 5:26 pm
“We see employee ownership as a significant tool to assist companies in providing stronger, more resilient, productive employment,” one advocate says.
A proposal to redefine employee ownership so it is synonymous with good corporate citizenship has been backed by European and Australian advocates, who say this model can be a driver for a better, fairer and more equal society.
Speaking recently at the Gandhi Foundation’s annual lecture, Graeme Nuttall OBE – a partner at European law firm Fieldfisher – called for employee ownership organisations to better fulfil environmental, social and governance (ESG) obligations.
Nuttall is a leading expert on this business model, having authored the influential Nuttall Review of Employee Ownership.
He said the time was right for employee ownership to add a “Gandhian purpose” to its work.
“What [Mahatma] Gandhi encourages us to consider is a new definition of employee ownership, a bolder definition that defines EO with enhanced corporate purpose, so that employee-owned companies are synonymous with good corporate citizenship,” Nuttall said.
“We need to see positive changes in society and our relationship with the environment. What better dynamic is there to make these essential changes than to channel the energies of employee owners towards finding and implementing solutions?”
Nuttall said this is not a radical suggestion for the sector given there are already employee-owned companies – such as Riverford Organics and Paradigm Norton – which are certified B Corporations.
This call has been backed by leading employee-owned organisations across Europe and also Australia.
The UK Employee Ownership Association, Employee Ownership Wales, Scotland for Employee Ownership, Irish ProShare Association and Employee Ownership Australia jointly announced they were in favour of the proposal, encouraging every employee-owned company to combine purpose and profit.
Seán Quill, a council member of the Irish ProShare Association, said employee-owned businesses were committed to helping build a fairer society.
“In these uncertain times we see employee ownership as a significant tool to assist companies in providing stronger, more resilient, productive employment,” Quill said.
“We also believe that where there is true employee engagement, employee ownership can and will make a positive contribution to their local environment and society by the influence of employees.”
Employee Ownership Association CEO Deb Oxley said employee-owned businesses tended to have an approach that helped them to do well financially while also doing good for the community.
“This is why it feels natural to make a call out to every employee-owned company to have a focus of making an overall positive contribution to society and the environment, as part of promoting the success of the company, and to make this commitment in the strongest terms appropriate to their business,” Oxley said.
Andrew Clements, deputy chair of Employee Ownership Australia, added that Australian businesses were also on board with the movement.
“We will encourage all Australian employee-owned companies to make positive contributions to society and the environment as part and parcel of running a successful business that provides good work,” Clements said.