Fieldfisher don't just advise on employee ownership, we helped create the UK's employee ownership framework and continue to work to simplify its regulation and increase its take-up in the UK and abroad. As the UK celebrates EO Day 2020 Fieldfisher reviews some of its recent activities to develop employee ownership in the UK and around the world.
Fieldfisher has been at the heart of promoting employee ownership for over 30 years. We can say with confidence that employee ownership is the answer to many questions, including how to achieve better business in a way that provides good work and reduces inequality.
Employee ownership continues to grow in the UK. We're delighted to remain at the forefront of achieving this success and to announce that over the last 18 months we've supported a business a month to convert to this successful business model. As a result, 1,300+ more employees now have a stake in their business and a voice in its affairs. Over £275m of value has transferred into employee ownership trusts (EOTs). That's a massive transfer of value into the hands of trustees that have a duty to act in the best interests of all employees. This way of owning and running a business fits well with the new nationwide recognition that the wellbeing of every worker is vital to making businesses succeed and to keeping the economy and society in good shape.
The remarkable success of EOTs in the UK means other countries are taking an interest in them. In particular, Fieldfisher is supporting the Irish ProShare Association and EO Australia to get EOTs accepted in Ireland and down under.
Fieldfisher's employee ownership team firmly believe that #EOIsTheAnswer.
Commenting on EO Day, Neil Palmer and Mark Gearing, partners in Fieldfisher's London office said:
"It is great to see that in London and Cambridge in particular, there have been increases in the range of businesses considering EO succession planning solutions across a variety of industries.
From technology consultancies to financial advisers via the arts, EO has been the answer."
Mary Erb, partner in Fieldfisher Manchester, who heads up our employee ownership offering in the North, added:
"The North of the UK has seen a substantial rise in the number of businesses looking to transfer to EO in the last year and, in a post-Covid landscape, I'm certain that we will see that number increase as business owners look for ways to uplift employee morale, increase employee engagement and safeguard the future of businesses that have been lovingly built up by them over the years.
Across a multitude of sectors, EO is, and will be, the answer".
Our EO expertise
In the UK
Partners Neil Palmer and Mark Gearing and tax expert Tamsin Nicholds started the year by providing a guide to the key elements behind the recent acceleration in the adoption of "EO" structures. More recently we've produced guides to help manage the impact of COVID-19:
"Why it is vital you keep the trustee of your employee ownership trust informed during the COVID-19 pandemic" by Mark Gearing and partner Peter Golden
"Covid-19 impact on share plans and employee trust owned companies" by Tamsin Nicholds and Mark Gearing
Members of the Fieldfisher Employee Ownership team have discussed employee ownership with various audiences and shared know-how, including:
Neil Palmer in the FT on "How a switch to employee ownership is bearing fruit" for Riverford Organics
Tamsin Nicholds and Neil Palmer are quoted extensively in the article by Fortune Magazine– "Bernie Sanders Wants Companies to Give Employees Ownership—a Trend That's Already Growing in the U.K."
Tamsin Nicholds and Neil Palmer are quoted in an article in Employee Benefits – "What value do employee ownership trusts bring to an organisation?"
Mary Erb is quoted in the construction industry Press
Graeme Nuttall is quoted in Business Leader magazine on whether "Employee ownership is the future of business"
Graeme Nuttall spoke at a conference marking the 150th anniversary of the birth of Mahatma Gandhi on the significance of the EOT controlled company as a modern economic model
Graeme Nuttall contributed to CISI's The Review magazine article on employee owned structures for financial advisers
Neil Palmer was featured in the April 2019 edition of the ICAEW's Corporate Financier on "Worker Takeovers" and Mary Erb featured in the November 2019 edition on "Taking Control"
trainee Hannah Bignell shared her experience of her first Employee Ownership Association annual conference in her article "Understanding all the benefits of employee ownership"
Neil Palmer led a legal workshop at the October 2019 Architecture Today conference on employee ownership and an Architecture Today roundtable on the experience of employee ownership among architects
We've supported the UK's Employee Ownership Association as Specialist Advisors and through contributing to activities such as ''Meet The Expert'' and leading a workshop on "How to establish good governance in your employee owned business" at its annual conference.
We're exploring new ideas including the use of EOTs in listed companies (see article in the ESOP Centre's newspad) and helping others develop ideas including the Cardiff Business School proposal to rescue and reset the UK economy after COVID-19 through debt-to-equity swaps and also aiding the Institute for the Future of Work in shaping a future of better work.
Elsewhere in Europe
We're assisting the Irish ProShare Association to establish the trust model of employee ownership in Ireland. See this recent article on "Ireland needs EOTs because employee ownership means more and better jobs"
Fieldfisher also contributed to a study commissioned by the Federal Ministry for Economic Affairs and Energy into the proliferation of employee shareholdings in Germany and Europe.
And further afield
We are working with Rutgers University's Institute for the Study of Employee Ownership and Profit Sharing to increase recognition of the trust model of employee ownership in the United States. We recently co-chaired a session on EOTs at this year's joint IAFEP 2020 Conference and Beyster Symposium.
In Australia, partner Graeme Nuttall's Review of Employee Ownership was described by the Chair of the Tax and Finance Committee as a "must read before you enter the jungle". Fieldfisher is working with EO Australia and Kings & Wood Mallesons to remove regulatory obstacles to the use of EOTs. Read this recent article on "Employee Ownership Trusts – A Refreshingly Different Ownership Model For Private Companies"
Improving UK regulation
Fieldfisher took part in the HM Revenue & Customs (HMRC) technical consultation on the Fifth Money Laundering Directive and the Trust Registration Service, making a detailed case for the exemption from registration of EOTs, as low risk entities that are sufficiently supervised by HMRC.
Mark Gearing helped the Worked Examples Group, a joint initiative with HMRC to reduce uncertainty for share valuations, to agree and publish new worked examples.
Continuing to shape UK policy
Partner Neil Palmer made a detailed submission to the Department for Digital, Culture Media & Sport on its consultation on the future definition of public service mutuals. Fieldfisher welcomed the opportunity to create a stronger brand identity but believed further work is needed on the future definition.
We seem to have managed to achieve all this whilst retaining a sense of humour. As one legal directory reported, the Fieldfisher Employee Ownership team is "Flexible, personable, responsive. Fun people to work with…" (Legal 500, 2019)
Contact any member of the Fieldfisher Employee Ownership team if you are interested in registering for this event, other employee ownership events or in receiving our employee ownership and share plans newsletter.
Mary Erb, Mark Gearing, Jennifer Martin, Tom Martin, Tamsin Nicholds, Graeme Nuttall, Neil Palmer & Beth Walters.
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