Wavehill is now an employee owned business – why we’ve done it
Back in the summer of 2019, the Directors here at Wavehill were discussing the challenges facing the company over the next few years, particularly in relation to succession planning and how we could best reward the commitment of staff at Wavehill. These discussions were partly prompted by research that we had recently completed about the ‘business succession timebomb’ which really illustrated how important planning for the future is. Those discussions culminated a couple of weeks ago, after an immense amount of work behind the scenes, with the setting up of Wavehill as an employee owned business.
Our aspirations behind this transition chimed well with a Community Wealth Building Summit I ‘attended’ on the 8th November. It was a really interesting day full of discussion about how community wealth building can and is being used to rebuild and reform local economies, especially post COVID-19. Community wealth building is a people-centred approach to local economic development that aims to reorganise local economies so that wealth is not extracted but redirected back into communities. It’s worth having a read of CLES’s annual summary of community wealth building policy change and practice: https://cles.org.uk/publications/community-wealth-building-2020/
There were a number of references during the day to employee owned businesses - companies where all employees have a ‘significant and meaningful’ stake in a business. This means employees not only have both a financial stake in the business (for example, by owning shares) but also a say in how it’s run. In our model, we’ve transferred the majority of company shares to a Trust which holds them on behalf of the staff. The Trust is overseen by Trustees (which includes a majority of employees and an independent external representative) who look after the interests of the staff.
We’re obviously being asked why we’ve set the company up in this way and it’s interesting that there seems to be an assumption that it’s something to do with the COVID-19 pandemic and the impact that’s had on the business. In truth, as noted above, we’ve been building up to the change to an employee owned business for quite a while, well before the outbreak of COVID-19.
So why did we do it? Succession was one of the reasons as noted above. However, becoming an employee owned business is a positive thing to do for a host of other reasons which is why it came up in discussions at the CLES summit. These positives include allowing staff to have a greater say in the development of the business (which has all sorts of knock-on benefits), and, importantly, sharing the benefits as the business (hopefully) continues to grow. And, because the company’s staff live within the local community – it creates a greater link between the business and the local economy and community, hence the link to community wealth building.
So, by making this move, we feel that we’ve both put a structure in place that helps to safeguard the structure of the business going forward, rewards the staff for their commitment to the business and enhances the impact that we can have on the local economy and community.
Wavehill’s transition to an employee owned business was supported by Employee Ownership Wales which is part of Social Business Wales, delivered by the Wales Co-operative Centre. https://employeeownershipwales.co.uk