New index to identify firms which commit to employee ownership models
Business Minister Jo Swinson has hailed a new FTSE-compliant UK Employee Ownership Index designed to make it easier for potential investors to identify which UK businesses have adopted employee ownership models.
She said evidence shows that businesses which adopt the employee ownership approach can be more profitable, create more jobs and become more resilient to economic shocks.
"As we build a stronger economy, there has never been a more important time to promote successful ways of running a business," she said.
Ms Swinson, a Lib Dem member of the Coalition Government, announced the new index alongside the 'EO One Year On Report' at a launch event in the City of London.
She said the index will enable investors to more easily identify the 69 UK public companies listed on the London Stock Exchange with at least 3% of their issued share capital held by (or for the benefit of) employees, other than members of the main board of directors.
The business minister, who was joined by four new employee ownership companies at the event, committed the Government to examining remaining issues faced by the sector.
She also called on businesses to tell the Coalition what they can do to further reduce the complexities of employee ownership.
At the launch event, Graeme Nuttall, author of the Nuttall Review into Employee Ownership, also announced a new "health check" to monitor ongoing progress towards making employee ownership a mainstream part of the UK economy.
The concept of employee ownership, where workers have a voice as well as a stake in the success of their business, is promoted as a sustainable model which helps drive staff commitment, productivity, resilience and innovation.
Initial findings of the index demonstrate that businesses which have embraced employee ownership models regularly outperform the comparable FTSE 100 and All-Share indices, said Ms Swinson.
The Employee Ownership Index is intended to enable potential investors to more easily identify thriving businesses and be part of their success.
"I hope more businesses recognise the value of this model and give their employees a greater stake in their future and the success of their company," said Ms Swinson.
Copyright Press Association 2013