Case Study

Independent Employee Ownership Trust (EOT) Trustee

The entity: UK incorporated limited company, set up to hold shares in the company on behalf of employees as beneficiaries of the trust
Service: Independent trustee

– How we got involved

Referred by a firm of UK-based legal advisers who were advising the company on their transition to employee ownership.

Included in their legal documents (the Articles of the trust company and the Trust deed) was a requirement to appoint an independent trustee.

We had an initial discussion of their business, their structure prior to transition to being employee owned, their future plans and what they wanted to achieve out of the EOT and maintain from their existing culture and ethos.

We discussed the timeline for implementation outside of the legal and tax considerations. Through this we reassured the founders that they could remove some of the pressures on transition day by planning their implementation and transition actions over a longer period of time to reflect their current business, resources, time commitment and need to maintain the focus on business growth.

Why us?

We had existing experience of acting as an independent trustee in the sector and for equivalent sized companies so could provide examples and tips for success.

We could clearly explain the role of the trustees, especially compared to that of the operating board.

We suggested ways to take away the pressure from a single transition day, including a transition period post implementation.

The nominated independent trustee contributed to the pre-implementation discussions with the founders and legal advisers, with a particular emphasis on practical application, ensuring that this individual could take this through to their appointed role beyond implementation.

We charged no fees until after the implementation.

Where we got involved

Appointed as the independent trustee and chair of the board of trustees.

Review of draft trust articles, trust deed and related documents, with an emphasis on practical application.

Worked through timelines for implementation so that it can be seen as a transition journey rather than a single day.

Took the focus away from legal completion on items that could be built over time, such as employee communications.

We provided sample documents for the company to use to communicate to employees, including employee Q&As on what an EOT is.

We held one-on-one meetings with potential employee trustees to explain the role and answer their questions and concerns.

Who do we work with

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Fellow trustees

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Operating board of the company

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Legal advisers prior to transition to employee ownership

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Former business owners

Fees

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Per meeting fee, based on a day rate for preparation, attendance and follow-up

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Year 1 support fee to cover implementation activities

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Ad hoc fees for non-meeting activities, larger projects require pre-approval by the client

Fees based on a day rate + VAT, payable monthly in arrears of activity

What else?

Held workshops with the operating board, the trust board and the combined board, to discuss and agree the roles and responsibilities of these 2 forums.

Provided ideas, examples and suggestions of how the employee voice could be incorporated into the EO governance framework.

Introduced an insurance adviser with existing knowledge of how EOs are structured to review their EO insurance requirements.

As chair of the trustees, we have set the agenda, reviewed board packs, chaired meetings, reviewed trust board minutes and maintained an actions register, as well as ensuring that trustee discussions are confined to trust matters and don’t stray into board, operations or employee topics.

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