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Why Employee Ownership is a Game Changer

Imagine it’s 2030. The world’s greatest generation of entrepreneurs, the baby boomers, have retired from the more than 600,000 small- and medium-sized businesses they founded. Due to the thousands of companies that went up for sale, and an awareness of the gravity of the transition, a significant number of business owners chose to sell their companies to their employees.

Canada has transformed from a country at a crossroads facing a growing inequality and a disappearing middle class to fostering an entrepreneurial, innovative private sector where many employees own part of the company they work for.

Because infinite growth is incompatible with a finite planet, employee-owned companies begin to use technology gains in productivity to decrease work hours. The loss in work hours is no longer front-page news, as employees source income from two streams: their labour and their ownership over productive assets. Canada moves towards a steady-state economy where well-being is just as important of a measure as GDP.

Alternatively, let’s imagine another 2030. The world’s greatest generation of entrepreneurs, the baby boomers, have retired, and their more than 600,000 businesses have transitioned through amalgamating with their competition, selling to new owners and corporate entities, or simply shutting down. A small number of companies are sold to their employees.

Canada’s economy remains largely the same, with private ownership remaining in the hands of a small minority and many families scraping paycheque to paycheque. Solutions to Canada’s growing income equality are tested but fail to address the heart of the problem.

Democracy in Canada has become increasingly stagnant and government continues to focus on growth and consumption as drivers to a good life.

I share these two overly-simplified examples of where we could be in 2030 to make a point: when planning for the future the topic of ownership is an essential part of the conversation.

As Brad Zarnett and Michael Townsend write in A Journey in Search of Capitalism 2.0:

“Ownership provides the power and authority to make decisions in the long-term interest of all stakeholders (including the planet); affecting our ability to deliver sustainable business strategies. This is an important consideration, especially in light of the limitations associated with the short-term behaviour of our stock markets.

“Ownership also provides the power to distribute wealth – this has a major impact on how we run our economies and businesses as well as how we live our lives.

“Universal ownership (by the employees, not the state) is a concept worthy of some discussion. It could create a much fairer economy, where hard work is genuinely rewarded at source, and without the need to get bogged-down with emotive and ideological arguments about taxation, benefits policies, or the size of the state.”

For me, this argument strikes a resonant chord, and is one of the reasons I’m now helping companies design and implement employee share ownership plans (ESOPs) at ESOP Builders, Canada’s largest provider of ESOPs for small- and medium-sized enterprises.

I owe my introduction to economic democracy and shared ownership from working as a journalist at Axiom News. It was more than five years ago that a small group of us, prompted by our founder and CEO Peter Pula, began exploring the concept of employee ownership.

We found ESOPs were quite common in the U.S. because of federal tax credits but, as a result, complicated. Some U.S. companies become employee owned solely for the tax advantages and did not educate their employees on the model and its benefits.

Many other ESOP companies have found the sweet spot, where shared ownership and shared decision making can create resilient, productive and highly engaged workplaces.

Despite this contrast of employee ownership cultures, employee-owned companies in the U.S. still outperform traditional companies.

We also found that Canada didn’t have nearly the same awareness of employee ownership and its business benefits. There are also no federal tax credits to encourage owners to implement this model. As a result, a much smaller number of companies in Canada are employee owned.

Herein lies the opportunity, and one I’m incredibly passionate to participate in.

Axiom News has invited me to blog about my work around designing and implementing ESOPs for small- and medium-sized privately-held Canadian companies. I look forward to sharing this work, as well as news and insight on what’s happening in employee ownership around the globe.

I’d like to end by acknowledging the Axiom News team. They took a chance and hired me “enthusiastically” out of university. I learned a lot at Axiom, from the team, and writing about leading business practices. Most importantly, I learned of the ability and need for business to be a force for good in the world.

This changed my life, and Axiom's work continues to inspire me while broadening my perspective. We need good stories that demonstrate what’s possible, and remind us to dream and act big.

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Camille Jensen

Employee Share Ownership Consultant

Camille Jensen is an employee share ownership consultant with ESOP Builders, Canada’s largest provider of employee share ownership plans (ESOPs) for small- and medium-sized enterprises.

Prior to joining ESOP Builders, Camille was a generative journalist and team member at Axiom News. She credits her time at Axiom as fundamental to her understanding that business is one of the best opportunities to make a difference in the world.

Camille is a B.C. Partner for Social Impact and volunteer with Okanagan Changemakers.

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