Gritty US Employee Owned Initiative

This link takes you to a 10 minute PBS film about the likely rebirth of a shipyard, through an employee owned start-up, together with a great up-to-date commentary by Chris Mackin, who appears in the film in a flashback to 1987. It makes the case well that properly democratic structures and processes are essential if employee-owned companies are to work well. The fact that the majority of ESOPs in the US do not give the employee-owners the right to vote their shares, while it may have encouraged conservative owners to take the ESOP route, ultimately disappoints the employee-owners and misses the performance gains that democratic ESOPs characteristically experience.

I’ve worked with many employee-owned companies, and have always found that employee-owners, when they are treated and trusted as the partners that they actually are, with full rights to information, influence and a share of the profits, take a highly responsible view of the big strategic questions. In particular, they normally wish to ensure first that enough is invested to keep the company strong, giving it a far higher priority than taking money out in distributions.

By contrast, private equity so-called ‘investors’ characteristically set out to extract as much cash as possible as quickly as possible. So the responsible investors are the employee-owners who set out to build strong businesses,  not the private equity people who try to cash out.

For the film and article by Chris Mackin, click here.

One thought on “Gritty US Employee Owned Initiative

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