The review by Graeme Nuttall of employee ownership has been published today by the Department of Business, Innovation and Science. The review makes 28 detailed recommendations aimed at introducing “the concept of employee ownership into the mainstream British economy” – a Coalition policy aim announced by the Deputy Prime Minister in January 2012, as we covered here.
The most eye-catching recommendation is that the Government should consider a “Right to Request employee ownership”, by the development of a voluntary code setting out best practice on requesting and agreeing employee ownership in a company, and by issuing a call for evidence on the introduction of a “statutory Right to Request consideration of an employee ownership proposal”. (Recommendations K and L.)
The review document is here and the accompanying BIS press release is here.
Key recommendations
From the press release:
“1. Government and the sector should raise awareness of employee ownership, through:
• Promoting a clearer identity for employee ownership: it is a business model in its own right which leads to proven benefits, used by many successful businesses today;
• Advocacy work by Government and the sector, and in particular to ensure that employee ownership is considered as an option at more stages of the business lifecycle; and
• A new Right to Request employee ownership, aimed at encouraging employees and their employers to discuss employee ownership proposals within their companies.
2. Government and the sector should increase the resources available to promote employee ownership, through:
• A sector-led Institute for employee ownership, to lead on information and guidance on employee ownership; and support companies adopting employee ownership as well as existing employee owned companies; and
• Better promotion of the various sources of finance that can be well suited to employee owned companies.
3. Government should make it easier to set up and run and employee owned company, through:
• Creating simplified ‘off the shelf’ models of an employee owned company which reduce the complexity and uncertainty of the process. Model templates and toolkits would provide all the information and guidance necessary to complete the process quickly and easily;
• Regulatory reform to simplify the processes underlying operating an employee owned company;
• Reviewing other regulation and tax policy to ensure complexity is minimised.
4. Measures to ensure implementation and maintain progress:
• A one-year on report to monitor progress in implementation; and
• A sector steering group to advise the Minister on the views of the employee ownership sector.”
See also: The Employee Ownership Advantage – BIS
Industrial and Provident Societies: A corporate vehicle for community investment
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