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Press Release

Ethics matters more to managers in employee-owned companies, new research reveals

25/09/2015

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United Kingdom

Fieldfisher has supported the Chartered Management Institute and MoralDNA in the production of a new report: "The MoralDNA of Employee-Owned Companies".

Managers in employee-owned companies are more likely to apply personal ethics to their professional lives than their counterparts working for companies with other forms of ownership, new research published today [25 September] reveals.

According to a survey of 1,019 workers in employee-owned companies, managers are less likely to make business decisions based on ‘blind’ obedience to corporate rules and are more likely to take into account the interests of their colleagues, customers and communities.

The research reveals that a ‘culture of equals’ results in more consistent decision making by all workers in employee-owned companies. Managers and non-managers are more likely to share the same ethical considerations in their decision making at work compared to employees in companies with other forms of ownership. 

Workers are also more likely to rate the leadership of employee-owned companies more favourably. Nine in 10 (90%) experience high-performing, ‘democratic, visionary, affiliative, and coaching’ leadership styles compared to just six in 10 (57%) workers in non-employee-owned businesses.

The findings of the survey have been compiled for a new report, The MoralDNA of Employee-Owned Companies, produced by the Chartered Management Institute (CMI) and business psychometric specialists MoralDNA, with support from Fieldfisher and the eaga Trust. The report was launched at a management industry gathering at Fieldfisher, long-term supporters of employee ownership.  

The new report compares the experiences of 1,019 managers and non-managers working for employee-owned companies to similar workers in a cross-section of companies with other forms of ownership.

Ann Francke, chief executive of CMI, commented on the findings:

“I urge company owners looking at new ways to improve business performance to read the report and its great case studies on flourishing employee-owned companies.

“The evidence here is that employee ownership improves employees’ commitment, positively shapes their thinking about ethical decisions and influences management action for the better. We should have more employee-owned companies and we should learn from their success.”

In other findings, 95% of workers in employee-owned companies report the ownership model having a positive effect on the workforce’s commitment to their company; 91% say it has a positive impact on their organisation’s performance; and 87% say that it enhances their company’s ability to attract new talent.

The report’s lead author and MoralDNA founder, Prof. Roger Steare, Corporate Philosopher in Residence at Cass Business School, said: “This research into the MoralDNA of employee-owned businesses clearly shows the benefits of applying the fundamental human rights of democracy and justice to the workplace. The modern joint-stock corporation is a feudal and autocratic anachronism in which fear is the dominant emotional driver of behaviour. It is no wonder that systemic corporate deceit, dishonesty and the destruction of all that we value are revealed to us on a daily basis in the news.

“In contrast, employee owned companies embody the humanity, integrity and sustainability vital to our prosperity. The shareholder value they create is truly one of “sharing" and I am delighted that in this research, we have been able to support the ideal that the best form of capitalism is one where workplace culture is rooted in those same moral principles that underpin democratic and fair societies.”    

Graeme Nuttall OBE, Fieldfisher partner and the government's independent advisor and author of Sharing Success: The Nuttall Review of Employee Ownership, said:

"This important report on the MoralDNA of employee-owned companies sends a strong signal to other businesses: employee ownership helps develop and sustain strong employee engagement, encourages long-term decision making and promotes a commitment to customer satisfaction. What's more, employee owned businesses are in a strong position to attract, and retain, committed staff. In short, adopting the employee ownership model is a step towards long term success for your business, regardless of industry."

To download a copy of The MoralDNA of Employee-Owned Companies and case studies visit: www.managers.org.uk/moraldna. Join in the conversation using #CMIethics. 

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