EFES NEWSLETTER - JULY 2022
ownership in SMEs
it is a fact, employee ownership is developing at a
dazzling rate in SMEs. Where? In Great Britain.
The secret? It is a collective employee ownership. Much
easier to finance and to manage than individual shareholdings.
Every day in the UK, a new SME is passed on to its employees.
Medium size, 75 employees. They often become 100% employee-owners.
Ten years ago, the Nuttal Review commissioned by the
British government gave the signal for this political
choice for employee ownership in SMEs. Hence a set of
measures based on the implementation of the "Employee
Ownership Trust" scheme.
Today Graeme Nuttal looks back on this success by showing
the UK is encouraging employee ownership internationally".
This ranges from the United States to Australia, Canada,
South Africa as well as Denmark and continental Europe.
The next 10 years could see collective employee ownership
established as the standard model of employee ownership
internationally for business successions.
Sami Adwan and a team of the University of Sussex just
published a beautiful new study work based on the EFES
database of employee share ownership in European companies.
The study provides new evidence on wether and how employee
share ownership affects the quality of financial reporting.
As a conclusion, they find a positive association between
broad-based employee share ownership and the quality
of financial reports.
It confirms that firms with more employee share ownership
have lower incentives to manipulate reported performance.
That employee share ownership at present levels is large
enough to drive employee incentives and affect corporate
policies. That the firms tend to disclose more information
when employees have larger stakes in the firm.
This is thus underscoring the role employee share ownership
can play in improving a firm's corporate governance,
and reducing the incentives to manipulate financial
the full study
have a selection of 33 remarkable articles in 7 countries
in June 2022: Belgium, Czechia, Denmark, Germany, France,
United Kingdom, United States.
Belgium: An idea to relaunch employee share ownership
Czechia: How employee share plans work.
Denmark: áThe group of experts for employee ownership
has submitted its recommendations to the Government.
France: New employee share plans for TotalEnergie,
for Voltalia, for Euroapi, for Sanofi, for Visiativ, for Unisoft,
for Veralia, for Korian, Business transfer through a workers'
cooperative for Embell'Fašade.
Germany: Towards a real share ownership policy in Germany,
the project of the Ministers of Finance and Justice.
UK: Record figures for business transfers to employees.
The Government plans a doubling in Wales. Every day a new
SME is transferred to employees. This month, among others,
the cases of: Potter Raper, TaxAssist, The Executive Shaving
Company, A&F Sprinklers, Carlton Bingo, Giles Wilson,
Evolve Family Law, Gilbert Thompson, Woods Hardwick, Denby
Campervans, Crooke Walker Consultancy, Great Cornish Food
USA: Business transfers in the form of ESOP plans for
GVC and for Apex Plumbing.
The full press review is available
political roadmap for employee ownership in Europe
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