The Labour Party’s Employee Ownership Proposal

I commented recently upon John McDonnell’s employee ownership proposal for Board Agenda. My view is that this does not constitute employee ownership

“A cap will be highly demotivating for employees who are already in financial participation schemes (they may receive less than they receive now) and insufficiently motivating for those new to financial participation who will see much of their ‘employee-owned’ assets diverted into government coffers.”

Financial participation is only one aspect of employee ownership. “In the public sector, community-interest companies (public service mutuals) provide a locked box of assets sometimes jointly owned by employees and service users. There is no financial return in these cases; the benefits to employees and other stakeholders arise from how the collective ownership of the asset provides the basis for equality of status and voice in shared decision-making.”

Worker/board representation has a “vital role to play” in employee ownership, “but only as part of a healthy governance system which is connected to the operating core of the business”.

“Financial participation combined with a voice system including board representation, is a potentially powerful model for organisational success,”