Employee ownership

The benefits and practicalities of employee ownership was the focus of the latest Cardiff Business School’s Breakfast Briefing Series.

Derek Walker, Chief Executive of the Wales Co-operative Centre was joined by David Sproxton, co-founder of Aardman Animations, to discuss Aardman’s transfer to employee ownership in 2018.

Derek began proceedings by defining employee ownership as having a majority of the business being owned by its employees and, crucially, employees having input into how the business is run.

Employee ownership is increasingly popular, with the number of employee-owned businesses in the UK growing by 30% in 2020.

Derek Walker explained “According to the Employee Ownership Association, there have been 250 new employee-owned businesses in the 18 months up to June 2021, making a total of 730 employee-owned businesses across the UK.”

He added “It can help with efficiencies and profit. Employees develop an owner-mindset over time and think about longer term strategies for doing things differently, and perhaps making efficiencies.”

Derek also discussed how employee ownership can aid with increased appetite for risk and recruitment and retention.

The Welsh Government has committed to doubling the number of employee owned businesses in Wales in this current Senedd term. The Wales Co-operative Centre has a team of experts available on-hand to support SMEs considering employee ownership.

David Sproxton, co-founder of Aardman Animations, joined the conversation, sharing the history of the company, which was founded in 1972. It has since grown into a global name with animations including Morph, Wallis and Gromit, and Chicken Run.

It was in 2018, after a few years considering their retirement plans, that co-founders David and Peter Lord made the move to employee ownership and sold the company to.an employee ownership trust.

David introduced the history of the company from the initial idea right up to the present day. When explaining the many steps of their journey to becoming employee-owned, one benefit of the change he identified was the strong communication structure they had put in place as an employee owned organisation, which helped them to overcome issues during COVID-19.

David continued “One of the big stresses in work is not feeling you are in control of your day-to-day or indeed your company’s future. Becoming employee owned pretty well ensures there is a future and employees have some control over it; some input; that sense of security.”

During the session, David shared the details of the steps that Aardman took in order to become employee owned, from the logistical and legal, to the many other issues they had to work through.

David ended the session with the following advice for companies considering employee ownership: “Do your homework, don’t rush into it. Work out what the purpose of your company is. And talk to people.”

Cardiff Business School's Breakfast Briefing Series is a network of events, which enables business contacts to find out more about the latest research and key developments from industrial partners.

Following lockdown measures, implemented by Welsh Government in response to the COVID-19 pandemic, the School’s Executive Education Team has moved the series online.

If you were unable to attend, watch this recording of the event.

For further information about employee ownership, contact the Wales Co-operative Centre.