Governance addresses the framework of rules and practices by which directors ensure openness, fairness and accountability in a company’s dealings with all its stakeholders and interests – be they employees, customers, investors, their community, suppliers and the environment. It is about ensuring that the right things are done for all stakeholders.
Traditionally, the practice of good governance is shared between the appointed directors and managers who run the business operationally. This is no different for employee-owned businesses, although in this case the directors and employees are also shareholders and therefore have rights and responsibilities that come with that role.
Whilst the directors are still responsible for the business day to day, in Employee Owned Businesses, there are often formal processes and structures in place to ensure that they are held accountable to the employee owners. In some businesses this is recorded in a formal constitution which clearly sets out the principles, established precedents and rules – the rights and responsibilities for all employee owners.
The employee voice is extremely important in Employee Owned Businesses and is normally represented formally through the Employee Trust trustees (if there is an EBT or EOT), via Employee Forums or Councils through greater communication and information sharing and consequently increased levels of trust.
Some of the areas where we work with clients are:
- Helping people understand how their rights and responsibilities support the purpose and values of the business
- Designing governance and embedding its effective practice
- Making sure the employee voice is truly represented and can be heard