Employee ownership and share schemes

Leave a comment

The Glasgow branch of the Co-operative Party organised an event to celebrate the International Year of Co-operatives on 31 May 2012. Held at the STUC building in the West End of the city, the event attracted two very prominent speakers: Graeme Nuttall, partner at European law firm Field Fisher Waterhouse and the Westminster government’s advisor on employee ownership; and Bernard Daly, Employee Share Ownership Plan (ESOP) director and board member of EFES. The theme of the event was employee ownership through financial participation. In Graham’s case, this referred to Employee Benefit Trusts (EBTs) while Bernard spoke of the history and effects of ESOPs.

While I won’t provide a transcript of their presentations, it is worth commenting briefly on the findings of their respective research. Graeme’s presentation examined the barriers to employee ownership in the UK. The consultation is ongoing (readers can contribute here) but already a number of (expected) obstacles have been identified, including:

  • general lack of awareness of employee ownership amongst entrepreneurs;
  • poor understanding of the model by advisors (financial, legal, and political);
  • existing information relating to employee ownership is often misunderstood; and
  • a lack of teaching and research of employee ownership in education.

Bernard’s presentation then sought to explain the role employee ownership, in particular ESOPs, can play in the privatisation of state-owned companies. He particularly emphasised the need for trade unions to embrace employee ownership and not cling desperately to ideologies that do not benefit their members.

Both of the speaker’s presentations are provided below:

Graeme Nuttall – Using employee benefit trusts for employee ownership

Bernard Daly – ESOPS And The Irish Crisis

How does a Garden of Eden grow?

1 Comment

Author: Morag

Having heard Tim Smit speak at an event at Paisley Abbey a couple of years ago, organized by the scottish social enterprise coalition I jumped at the chance of their organized study tour to the legendary Eden Project in Cornwall. Throw in a gourmet dinner at Fifteen Cornwall and I even offered to pay for the visit myself and take annual leave! Having an insightful and generous director…. (any chance of a pay rise this year?!) , meant neither sacrifices were required and I happily left home at 6am to begin the journey to the Garden of Eden.

The aim of my visit – apart from the obvious sensory enjoyment- was to see how really successful social enterprises work and what CETS can learn from them.  Eden and Fifteencornwall are businesses, for money making purposes as well as social good, quite different from a general perception that they are some sort of charity funded partly by token selling of questionable quality goods and services but mostly by government grants, or by you and me through donations to a noisy tin can.

No tin can mentality evident at Eden – any lurking tin can would have been recycled into a pair of earrings or used in an “educational” sculpture.

The first impression of Eden is surprise. Initially that such a huge project was undertaken in such a remote area, and then wonder, at the energy and imagination the development and sustainability of such a site required.  Listening to Tim made me realize why Eden has now managed to survive to celebrate its 10th birthday! Finding out how he secured the funding for this project included needing nerves of steel and perhaps distinct criminal tendencies! In another life with a less supportive family, perhaps his type of character would have become a notorious Robin Hood style gangster or a benign dictator? The traits are the same but the impact on society is different. Fortunately for Cornwall, whatever Tim’s start in life was, he ended up doing remarkable things, for the good. This was evident in the way he talked enthusiastically, with humor and often digressed then meandered back to various points, almost as if he has given his brain the same freedom of expression as he gives his staff!  However, as with the Eden employees – it was always the same message – “Put your whole self into whatever you are doing, take the risks and responsibility with no negativity!” His passion for giving people autonomy to do, and be the best they can, is quite inspiring.

This is what I believe Eden is about:  self-motivation and self-determination to create a better “world” (macro, micro, or bio) and enjoy the process.  The emphasis is on something tangible, not theoretical, something that “is” in a practical way, and something that you can “do”. In a modern “virtual” world it seems we need an antidote to living solely in “the cloud” and people like making and creating stuff.

The result- an economically viable social enterprise!

On my return from this visit I was delighted to read that Stonelaw High’s Young Co-operative had won the Young Social Entrepreneurs of the year at a star studded event in London – congratulations to them. They have been involved in this project for over 5 years now  – have a look at – now their turnover has exceeded £150K proving that this co-operative business model is profitable and works! All they needed was a small start up grant from CETS five years ago (though my Christmas shopping sprees at their annual fayres, have no doubt boosted their profits significantly!) and the resulting success of the venture came from the students motivation and engagement with the business. I do here have to recognize that their “lead” teacher, Isabel Gilchrist, displays many similarities to Tim Smit  – loads of enthusiasm, energy, commitment and belief in the people around her to do a good job.

I’m beginning to see a pattern here….. good leaders with good social goals, who believe in their “crew”…… can achieve anything they really want? If Eden have such belief in their crew and ask them to accept risk and responsibility then the next obvious step is to share ownership with them, so why hasn’t Tim developed it into a co-op, like the young people at Stonelaw?  The “buy in” from the crew could give it even more longevity with potential to grow a democratic Cornwall, along the line of Mondragon ?

Since this was a funded study tour, I needed to explore what benefits my visit will have for the work that CETS does? In order to do this I needed to ask myself a number of questions:

1. What is my job, and what do CETS do?

Not having had a job description for sometime has been very liberating but it is also much more challenging. Where to start and how to choose what to do?! Having distilled my job down to a concept rather than a series of activities: my Mission (should I choose to take it) appears to be “to enlighten and encourage the Scottish youth to understand and apply the values and principles of the Co-operative movement to their life and work” Without sounding like a 19th century free Presbyterian minister from the Western Isles, that could be quite tricky and possibly fairly off putting to Scottish young people! How to make this concept fun and engaging for students and acreditable for teachers would be a success criterion! A visit to Eden and Fifteen was certainly fun and engaging, how to make “exams” in this area meaningful and worthwhile is difficult and quite frankly, I think, pointless…….. So what to do?

2.What have I learned from my visit?

  • Do what you are good at doing and enjoy it.
  • People need practical outcomes, something tangible to make them feel engaged, useful and alive and consequently valued. (See earlier Stonelaw bit)
  • Negative people destroy everyone else’s energy
  • Follow your intuition; think big, blag if you have to and keep believing in your dream. (If you haven’t got a dream get one!)

3. How can apply what I have learned?

This is the tricky bit. Maybe you should only ever look to “self development” as all else is arrogance and vanity and eventually futile?  The only person you can ever educate is yourself, as education has to be a self-motivated and willingly participated in experience to create any change. Not a principle that all teachers can adopt I suspect, despite them being “reflective practitioners”.  The exam system and target setting agenda see to that! However, giving real life experiences such as setting up their own co-operative and running it for profit now can be accredited. We are supporting 200 young people with CoPE ASDAN accreditation.  At long last, the education system is beginning to recognize that vocational and academic skill have equal value. Young people can now do the “useful stuff” within the school day rather than having to squeeze it into lunchtimes a and after school activities,

Perhaps my visit has also allowed me to give myself (more?!) permission to do what I think is right; identifying others’ strengths, telling them what I enjoy about them and encouraging them to follow their intuitions and instincts? Ask them to think big and believe in their visions- ignore  (or sack!) the “abutters” and the “no ah canny becausers”. Sacking those individuals of course may decimate large swathes of certain sectors of the public sector, so its probably just as well I don’t have that kind of power, but I can try to ignore the naysayers and focus on working with the optimistic risk takers!

If this all works, we should see inspirational co-ops springing up in educational establishments all over Scotland. This then may show that my visit to see how to “grow” the Eden effect has been worth the investment and maybe the adults will see the wisdom of the young peoples’ ways?

You have been challenged – in a positive and optimistic way of course!

A Growth Manifesto for Scotland – The role of co-operatives

Leave a comment

The Scottish Labour party recently launched its manifesto for growth ahead of the upcoming elections in May. Two important areas were earmarked for development: business and entrepreneurship education for students; and the need to increase the number of co-operative enterprises.

“We want to ensure that every graduate receives entrepreneurship and business education as part of their course and we will also introduce a new “Flying Start” programme to support the ambition of those graduates who want to set up a business.”

“The United Nations has decreed 2012 the International Year of the Co-operative. We are committed to ensuring that Scotland plays its full part by increasing the number of co-operative start-ups.”

Both of these ideas are merely just that at the moment; ideas. They do however, raise a vital point about business education and its impact on the co-operative model of enterprise in Scotland. The dearth of entrepreneurial activity (Mondragon and other noticable examples aside) in the co-operative movement has inhibited the growth and recognition of the co-operative model of enterprise. Its cause can be somewhat attributed to the style and content of business and entrepreneurship education in Scotland. Very few courses in these areas mention the co-operative model of enterprise, let alone provide advice and guidance on how to set one up.

The co-operative business model contains many elements that distinguish it from more conventional models of business ownership. It also shares some common features. To help clear up this confusion and provide direction, the Co-operative Education Trust Scotland, in partnership with the University of Aberdeen, is producing a number of resources to provide students with the knowledge, skills and abilities to understand and utilise the co-operative model of enterprise. Details of these resources can be found on our project website:

www.abdn.ac.uk/cets/resources

Scottish Labour Party’s Manifesto for Growth