In recent months both the cosmetics company Lush and the organic food supplier Riverford have committed to becoming, in part, employee-owned businesses.
In late 2017 Lush launched its Employee Benefit Trust, whereby 10% of new shares in the business are held in the trust on behalf of all permanent Lush Group employees. Lush hopes this will protect the values of the company, whilst also recognising the significant contribution employees make towards its success.
Riverford, a company best known for its organic vegetable delivery box scheme, followed suit announcing that it was handing over 76% of its business to its 650 employees. The shares will be held in trust, and be overseen by a board that is involved in the running of Riverford alongside a staff council. It plans to create a business structure that better empowers staff to have a say in the future of the firm.
Employee-owned businesses can help improve productivity and resilience. Employees feel more invested in the overall success of the business, whilst protecting the company from potential venture capitalists and investors who don’t always fully understand the brand.
For these reasons, are more and more companies are moving towards employee ownership?