A quiet revolution is under way in British boardrooms. More than 100 companies have now transferred majority ownership to their employees under the Employee Ownership Trust (EOT) model, a structure that grants staff a direct stake in the business without the complexities of individual share ownership. The trend has accelerated since 2023, with new legislation providing tax incentives for founders who sell controlling interests to trusts on behalf of their workers.
Proponents argue that employee ownership boosts productivity by aligning incentives. A study by the Employee Ownership Association found that companies using the model report 4-10% higher productivity growth than conventional peers. The model is particularly appealing to small and medium-sized enterprises where founders seek a succession plan that preserves company culture.
One recent convert is John Beresford, founder of a Yorkshire-based engineering firm employing 120 people. In a statement, he said: "I wanted to ensure the business remained independent and that the people who built it shared in its success." The sale was completed in March 2024, with the trust taking a 51% stake.
Critics caution that employee ownership is not a universal remedy. Financial viability depends on the company generating consistent profits to service trust debt, and governance can become unwieldy if staff do not have the expertise to elect effective trustees. Nevertheless, the Treasury expects the number of employee-owned businesses to double to 200 by 2026, reflecting a broader shift towards stakeholder capitalism.
For the government, the model offers a low-cost way to distribute wealth without direct intervention. For workers, it promises a real share of the rewards. For the economy, it may provide a buffer against short-termist shareholder demands. As the post-Brexit landscape demands new sources of growth, employee ownership is emerging as a pragmatic, albeit imperfect, tool.
