New report The Ownership Dividend urges government for a more productive and inclusive economy

With two-thirds of SMEs and family businesses in the UK at risk of facing succession uncertainty - an independent panel of 20 leading business organisations has recommended that employee ownership is essential to the benefit of the economy.

The panel’s findings and recommendations were published in the report, The Ownership Dividend, supported by the academic expertise of Professor Ajay Bhalla and Dr Aneesh Banerjee of Cass Business School, and Professor Joseph Lampel from Alliance Manchester Business School.

A national review

The panel of the Ownership Effect Inquiry, a year-long independent business-led review, heard evidence from 100 employee-owned businesses and advisers at national hearings across the UK.

Its findings concluded more employee-owned businesses would improve UK productivity, enhance the resilience of regional economies by rooting jobs locally and motivate more engaged employees through transparent and effective models of corporate governance.

"This is the most in-depth and comprehensive report of Employee Ownership to date. The findings, detailed in The Ownership Dividend report, conclude that employee ownership can provide the positive responses needed to many of the challenges currently facing the UK economy such as its poor productivity record. The report calls on policy makers to invest in measures to encourage more employee ownership."

Professor Bhalla, Dr Banerjee and Professor Lampel

Report findings

Following the publication of The Ownership Dividend, the government is being urged to invest in capacity building for employee ownership in the UK that echoes the successful approach by the Scottish government, supported by trailblazing regional pilot projects focussed on resilience and succession as well as a national strategy for business ownership.

The report reveals how the employee ownership sector can provide the positive responses needed to address many of the challenges currently facing the UK economy.

The Ownership Dividend can deliver a more productive and inclusive economy in three ways:

1. Improving UK productivity – via more businesses unlocking the enhanced performance and productivity powered by the increased personal endeavour and discretional efforts of employees acting with greater common purpose once they become employee-owners
2. Resilient regional economies – via a more sustainable and resilient business model that root jobs locally by providing an effective business succession solution, business independence and the ability to plan growth and investment over the longer term
3. More engaged employees – via more inclusive, transparent and effective models of corporate governance and employee engagement which better involve, motivate and financially reward individuals through their ownership stake

For the UK to fully benefit from the Ownership Dividend the government are called to:

1. Invest in ownership capacity building that echoes Scotland’s successful scheme that has delivered a tenfold return on investment for every £1 devoted to on-the-ground support.
2. Create a National Strategy for Business Ownership working with the sector and key stakeholders to establish the best possible business climate in which to foster the growth of EO and mutual firms.
3. UK regions creating trailblazing pilot projects focussed on resilience and succession that bring the capacity building to life byraising awareness of succession options that include employee ownership and providing hands-on support and helping to attract inward investment to back locally based firms that are looking to transition to EO.

Baroness Sharon Bowles, Chair of the Ownership Effect Inquiry, said:

"The Panel’s conclusion is clear: there is a significant and valuable dividend to be obtained from creating greater amounts of employee ownership in our economy. I am proud to have chaired this independent Inquiry that has produced the most comprehensive, robust and compelling evidence about employee ownership in the UK to date supported by the academic rigour of Cass Business School and Aliance Manchester Business School."

The Inquiry was sponsored by social investor The eaga Trust, together with the UK’s largest employee-owned business the John Lewis Partnership. It was managed by the Employee Ownership Association, supported by the academic rigour of Cass Business School and Alliance Manchester Business School and was chaired by Baroness Bowles of Berkhamsted.