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Employee Ownership is an increasingly popular option

Aardman, creator of Wallace & Gromit, is one of the latest businesses to go for the increasingly popular employee-ownership option. Marc Mullen asks if it's a long-term trend of just flavour of the month.

For the founder of a business, saying goodbye can be the hardest thing to do. So tough, in fact, that some never do it. Often, founders will know every single employee. Another tie binding the owner to the company can be that it is an integral part of the local community. Research by insurer Legal & General found that only 42% of the UK’s family-run firms have planned succession. Today, for a plethora of reasons, the next generation is perhaps less willing to take over at the helm of the family business. And sometimes an owner-manager has so much control over the company they founded that the next generation of management has not been able to come through. Second-tier employees may not have any significant equity stake, or the means to re-mortgage their house to acquire such a stake. 

“Owners must have a succession plan,” says Deb Oxley, chief executive of the Employee Ownership Association (EOA), who was awarded an OBE in the 2019 honours for services to employee ownership. “And that plan must be about changing ownership and managing leadership succession.”

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About the article

This article originates from the June 2019 edition of Corporate Financier magazine. Access the archive ranging from 2013 to the present.