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Employee ownership is on the rise

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There are 69 UK public companies listed on the London Stock Exchange that have at least 3 per cent of their issued share capital held by, or for, the benefit of employees other than main board directors, research shows.

The UK Employee Ownership (EO) Index was launched by business minister Jo Swinson today to enable investors to easily identify which companies are employee owned.

Employee ownership, where workers have a voice as well as a stake in the success of their business, is recognised as a sustainable business model which helps drive staff commitment, productivity, resilience and innovation. 

The EO Index demonstrates that in previous periods, businesses in the sector that have embraced employee ownership regularly outperform the comparable FTSE 100 and All-Share indices. 

“As we build a stronger economy, there has never been a more important time to promote successful ways of running a business,” said business minister Jo Swinson. “Evidence shows that businesses that adopt the employee ownership model can be more profitable, create more jobs and are more resilient to economic shocks. 

“The Nuttall Review set us an ambitious challenge a year ago but I am delighted to say the government and the sector have risen to meet it. We have made substantial progress in laying the foundations for a thriving and growing employee ownership sector in the UK, but there is more to do to raise awareness.”

At the launch event, Graeme Nuttall, the author of the Nuttall Review into Employee Ownership, announced a new “health check” to monitor ongoing progress by government and the EO sector towards making employee ownership a mainstream part of the UK economy. 

The report, which measures the progress made by government and the EO sector against each of the 28 Nuttall Review recommendations made in October 2012, found that significant progress has been made against all of the recommendations. In particular:

  • Raising awareness of employee ownership through the first national Employee Ownership Day on 4 July 2013 
  • The allocation of £50m annually from 2014-15 to introduce tax reliefs for businesses adopting the employee ownership model 
  • The publication of joint government and industry-led guidance to help businesses adopt the employee ownership model. 

“One year on from the government’s response to the Nuttall Review, it is right to say that much has been achieved. I thank all those who have helped make the Nuttall Review recommendations move from the page to reality. However the bar has now been raised and there is more to do if we are all to succeed in making this the decade of employee ownership,” added Graeme Nuttall.

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