While the U.S. government suffered its January meltdown, Fifty by Fifty was busy promoting the many benefits of employee ownership for American workers and the U.S. economy. The year started with two important conferences, and the publication of an op-ed by Fifty by Fifty co-founder Marjorie Kelly that appeared in Fast Company.
Employee Owners Put Mission First
In a January 11 commentary in Fast Company, “To make companies moral, make the employees the owners,” Marjorie Kelly laid out Fifty by Fifty’s thesis that the employee-owned benefit corporation (or employee-owned B Corp) is taking shape as the enterprise design most suited for the challenges of the twenty-first century. Recounting the story of EA Engineering, she explained how going public—the ultimate goal for so many start-ups—had become a nightmare for founder Loren Jensen. For EA, the pressure to meet shareholder demands for profits undermined the company’s scientific and environmental mission, leading to increased instability, plummeting staff morale, and trouble with the SEC. In the end, Jensen bought the company back. New President Ian MacFarlane transferred it through an ESOP to employees while also re-chartering as a benefit corporation. This new ownership framework created the stability that allowed the company to regain its footing—and to engage in the kind of moral decision making that is necessary to ensure business decisions take into consideration their social and environmental impact. The public corporation, designed for financial returns, does not have this capacity for moral decision making, even in the face of the climate crisis. Employee ownership can reverse that equation.
Kelso Fellows Meet at Rutgers Institute for the Study of Employee Ownership and Profit Sharing
In a three-day workshop, Fifty by Fifty co-founders Jessica Rose and Marjorie Kelly joined their colleagues from across the employee ownership sector in exploring the breadth and impact of various forms of broad-based capital ownership and income in the U.S. and abroad. Presentations addressed a wide range of issues, from CEOs talking about how to run a great employee-owned company to researchers examining the impact of shared ownership to advocates promoting policy reforms to support more widespread access to capital shares. On one panel, Ian MacFarlane of EA Engineering, Paul Decker of Mathematica Policy Research, and Carolyn Stanworth of BL Companies, all employee-owned companies, discussed creating and maintaining employee ownership cultures—and how these cultures improve their overall performance. As Stanworth notes, “As owners, employees benefit directly as their hard work increases the value of the company. The company also benefits from the efforts of employees, and those benefits go back to all owners—the employees themselves.” Also critical is having a strong mission. Decker said, “We’re employee-owned, but more than that we’re a mission-driven company.” He said the mission of Mathematica, which had revenue of $206 million last year, is to “improve public well-being” through excellence in information collection and analysis.
The economic benefits of ownership can be quite substantial, according to Nancy Wiefek, who presented recent research showing that S Corporation ESOP participants have retirement fund balances that are twice the American average: $170,326 compared to $80,339. Later in a keynote address, Melissa Hoover of the Democracy at Work Institute, challenged the audience to take these impacts even further by thinking 50 years into the future and examining how the choices the employee ownership movement makes today may shape that future. “Employee ownership is a tool,” she said, “it is not an end in itself.” The ultimate aim is to create a world that is fairer and more just, she argued. When we talk about “going to scale,” it shouldn’t be simply to grow employee-owned businesses but to grow a movement that can acquire the power to change systems.
Organic Valley Convening: Ownership on a Mission
At a three-day winter retreat in La Crosse, WI, the dairy cooperative Organic Valley—a $1.2 billion coop owned by 1200 organic famers—brought together 100 experts, practitioners, and academics to explore mission-based models of ownership and expand and empower stewardship ownership designs. The theme of the event was the principle of stewardship of earth, of life, and of community. Three speakers, Theresa Marquez from Organic Valley, author and Francis Moore Lappe, and Fifty by Fifty’s co-founder Marjorie Kelly spoke to the destruction being wrought by our current form of ownership in terms of rising inequality, the undermining of democracy, and the impact on the earth and community well-being. Additionally, leaders of firms with a variety of cooperative ownership models provided examples of what’s possible. These included the Cincinnati Union Co-op Initiative, Cooperative Home Care Associates, the nation’s largest worker co-op, and Organically Grown, which recently reorganized as a Perpetual Trust. The conference concluded with a lively discussion of how to educate and engage the more than 250 million coop members in the U.S., how to finance the conversion of existing businesses to stewardship designs, and how to build political power to challenge the dominant ownership system.
Fifty by Fifty
Millions of Americans already have an ownership stake in their workplace. More than 7,000 U.S. companies are owned wholly or in part by their employees—the people who work there every day.