Increasing
numbers of business owners are reviewing their business options and succession
plans, with a rapidly rising number of these opting for an exit via an Employee
Ownership Trust (EOT). bbpMedia published a series of articles in their June 2022 Midlands edition on the routes to establishing an EOT. The following is one of those articles:
For
those wishing to adopt this model, such as a retiring company owner seeking to
protect the legacy of their business, an EOT has many advantages. This trust model is often chosen as it can create
employee ownership without requiring finance from employees, provides a
long-term ownership model and is straightforward to administer. It can also
have a much shorter lead time and less disruption than a trade sale, whilst
also providing a tax beneficial option for the sellers and the employees.
Hence, as a solution, not
only does an EOT provide an effective exit, it also rewards all employees for
their contribution to the success of the business.
So
far, so good, but once sold to the trust, what next? How do you energise the
company under its new ownership structure to create benefit for the business
and its employees?
Independent
Directors & Trustees Ltd (IDT) is a team of individuals with extensive
board level and leadership experience across a wide range of sectors. They
bring their expertise and insights to enable their clients to develop solid
foundations on which to build long term success as an EOT.
The
key difference between IDT and many other advisors, or stand alone independent
trustees, is that the team are able to share insights from a breadth of EOT
organisations to enable their clients to indirectly learn from others. They can work with leadership teams to model
their EOT organisational structure building on the existing strengths, whilst
layering on top the requirements of an EOT. They can also act as the formally
appointed independent trustee, chairing trust board meetings and coaching fellow
trustees,
We [BPP Media] spoke to Sue Lawrence, founder of IDT, who is herself an independent trustee as
well as the lead on EOT implementation and early-stage transition, about the
crucial importance of having an effective organisational structure.
She
said: “The real benefit of being an EOT is having a leadership team that can
set the future direction of the company, with the added benefit of being
informed by employee insights. An effective EOT has clear roles and
responsibilities aligned to effective two-way communication that creates mutual
trust and a breadth of participation. The legacy of the founder and the culture
of the company needs to be maintained whilst building this greater
participation and involvement. Through this an EOT organisation can start to
build on the opportunities available from their new status.”
With
IDT everything is about collaboration and support, working with client
organisations to enhance the existing business through identifying
opportunities available to them by being an EOT, through discussion, tailor-made
workshops and providing EOT materials developed through experience. One
workshop that is particularly well subscribed is the initial management vs
trust roles and responsibilities, often used as the spring-board for the
organisation shortly after their transition.
For more information on IDT and their
services, get in touch by calling +44 (0)203 926
6000, emailing info@directorsandtrustees.co.uk
or visit the web site: https://www.independentdirectorsandtrustees.co.uk/
This article was originally published by bbpMedia in The Business Post (Midlands edition, number 99) in June 2022. The published article, as well as other articles on employee ownership can be found via their website at: The Business Post Midlands Edition 99 (bbpmedia.co.uk)
