FlowStore became an employee owned company in June 2017. After 33 years of continuous business as a family owned company, this has ensured a managed succession for the coming era.
Employee ownership (EO) is, in its simplest form, a structure where the business is owned, either directly or indirectly, by its employees. EO is becoming more popular every year. There are many models of the system in use but all work on the same basic premise.
Perhaps the most well-known employee owned company is the John Lewis Partnership. JLP have a Trust which holds the shares on behalf of the employees, so no employee actually owns shares in their own right.
FlowStore is different; we operate a hybrid system in which some shares are held directly by employees but the majority are held in an Employee Benefit Trust.
FlowStore has a normal board of directors who are charged with running the company on a day-to-day basis, setting strategy and ensuring the continued financial health of the business.
Every three years each director must stand for re-election by the shareholders – the employees – and this ensures that the well-being of the employees is at the heart of every decision.
The Employee Ownership Trust, which is the majority shareholder, is also charged with holding the board to account. The Trust meets four times per year to discuss the health of the company, both in terms of the financial and cultural perspectives, and can call on the main board to review any particular matters of concern.
In any business the shareholders have a say in the running of the company. As well as having its main executive FlowStore Systems board, FlowStore has an employee trustee board.
This consists of main board directors, plus employee representatives and an independent trustee director. There is thus a balance of experience from both FlowStore and the wider business community. This structure ensures the concerns of the employees are always considered when key decisions are made.
Like all shareholders, FlowStore employees have regular updates on the company’s performance, both financially and operationally. At the end of each financial year the main board will review the performance of the company and can, under current legislation, recommend to the trustee board that dividends may be paid, usually as tax-free bonus payments within limits, to all qualifying employees if prudent so to do.
Companies are increasingly opting for this type of EO structure, and statistics show that in areas of efficiency, profitability, longevity, staff retention and loyalty, an employee owned business can provide the best benefits to staff, suppliers and customers.
FlowStore Systems Ltd transitioned to an EO company on 30 June 2017.
Fairview Business Centre 29-31 Clayton Road, Hayes, Middlesex UB3 1AN, UK.
Tel: +44 (0)20 8581 5555 Fax: +44 (0)208 581 5575
Registered office: Fairview Business Centre 29-31 Clayton Road, Hayes, Middlesex UB3 1AN, England.
Registered No: 1734709