A panel of businesses shared their experience of employee ownership at a special event hosted by Shakespeare Martineau to mark Employee Ownership Day on Friday July 3.
The purpose of Employee Ownership Day is to encourage businesses to consider whether employee-ownership could be part of their strategic plan.
According to the Employee Ownership Association (EOA), employee-owned companies contribute 4 per cent of UK GDP, which equates to about £30 billion annually.
The sector is also growing at a rate of 9 per cent each year and is expected to increase its contribution to UK GDP to 10 per cent by 2020.
Gary Davie, corporate law partner at Shakespeare Martineau, who is himself a director of an employee-owned business, said: “This event has been extremely useful as a means of sharing real experiences of employee ownership.
“Achieving consensus to adopt an employee-owned structure can be challenging for some businesses, particularly if managers have been used to making decisions in a more autocratic way. “However, business leaders can do much more to secure their buy-in by reassuring them that a strong and effective management team will be needed to guide the decision-making.
“Businesses often consider employee ownership for the first time when planning for succession.
“At such times, the pressure to find a solution that meets the long-term interests of the business and enables the out-going shareholders to realise value from their investments is considerable.
“The fact that a capital gains tax exemption exists, which directly applies to the disposal of shares that represent a controlling interest in a company being transferred into an employee ownership trust, provides a valuable, added incentive.”
Iain Hasdell, chief executive at the Employee Ownership Association, added: “As more businesses choose to become employee owned it is vital that those that have already done so share their experiences so others can learn from them.
“This event has created a forum for companies to come together to discuss some of the techniques and solutions they have used in a practical and constructive way.”