Is employee-ownership compatible with social enterprise?

john-lewisNow, that’s a weird headline, I hear some saying. Of course it’s compatible — what does he think co-operatives are?

I have been musing on this ever since reading Treasury keen to boost John Lewis-style ownership in the Guardian last Thursday.  Apparently, the treasury is about to consult on making up to £50m-worth of tax incentives available to encourage  businesses to adopt employee-ownership models.

Well, the answer does seem an obvious ‘yes’. In which case, why don’t we see more employee-ownership (including democratic decision-making and management) in the wider social enterprise movement — and by ‘wider’, I mean social enterprises beyond the co-op sector, those operating primarily for community good?

Is it because employee-ownership isn’t compatible with these sorts of social enterprises?

This could well be the case. After all, if a business seeks primarily to reinvest surpluses in the achievement of its social mission, then it stands to reason that there won’t be (and some might say shouldn’t be) much left over to offer financial incentives to employee-owners.

I can understand that. But if the government wants to encourage employee-ownership with tax incentives then surely we should be looking at this to try and work out whether employee-ownership has a role to play in the wider ‘for the benefit of the community’ social enterprise sector?

If we were able to find ways of incorporating employee-ownership into the wider social enterprise movement  then it would be the first major innovation in social enterprise ownership and management models in years.

Or perhaps I am barking up entirely the wrong tree and someone will point out  numerous examples of social enterprises operating for the wider community good that are already employee-owned.

Somehow, I don’t think they will. Because I think that with the exception of the co-op movement we have allowed our idea of what makes employee-ownership to become dominated by the question of financial incentives rather than those of employee participation and control. (Oddly enough, on the issue of community representation and involvement on Boards we are entirely comfortable with the notion of responsibility without pay!)

It seems to me — unless, of course, a strong case to the contrary exists, in which case I’d like to hear it — that the wider social enterprise movement should be seeking greater employee control as a natural extension of social value and social good, and that in failing to identify an appropriate employee-ownership model for the wider social enterprise movement we are missing a major opportunity.

What do you think? Maybe it is just the heat, but it still strikes me as an intriguing question…

Birmingham UK. Freelance research, evaluation and policy consultant specialising in social enterprise and the third sector. I maintain the BSSEC blog and website

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