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Taking ownership

02 November 2018 by Simon Osborne

Taking ownership

Share plans conference serves a timely reminder that ownership matters

On 3 October, I attended ProShare’s 26th annual employee share plans conference in London. The event saw a record-breaking 375 attendees from the share plans industry come together to learn more about why ownership matters, the theme of this year’s conference.

Rosemary Lemon of Hays and Paul McGee (aka The SUMO Guy) provided keynote speeches about engaging and rewarding employees and how you can fulfil your potential, seize opportunities and respond to challenging situations with a positive attitude, that were extremely well-received. The conference also covered topics ranging from malus and clawback, online security and gender pay gap to expanding the role of the remuneration committee and how to support global incentive plans. 

All the major industry players spoke at the conference, including Aviva, Barclays Global Stock and Reward Services, Computershare, Equiniti, HMRC Shares and Assets Valuation, Sage and YBS Share Plans. There were some useful case studies by Rio Tinto, which is using animation to explain executive remuneration, Imperial Brands, Skyscanner and WEALTH at work, which looked at the important issue of finding engaging methods of delivery to improve financial education.

With the leader of the UK Labour party, Jeremy Corbyn, proposing at the Labour party conference just weeks before to allocate to employees a third of board seats, the conference was the perfect opportunity to remind people that employee share ownership (ESO) offers a well-trodden and profoundly uncontroversial path to sharing the wealth of companies with those who help to create it.

The UK’s flagship all-employee share plans Save As You Earn (SAYE) and the Share Incentive Plan (SIP) were originally crafted as ways of democratising share ownership in the UK. Yet 38 and 18 years on from their respective births, far more of the UK’s listed equity capital is beneficially owned by the rest of the world than by UK employees, the general public and UK pension funds put together.

“ESO offers a well-trodden and profoundly uncontroversial path to sharing the wealth of companies with those who help to create it.”

That demonstrates not just the considerable forces of globalisation, but also the attractiveness of the UK as a place to do business and invest. The UK needs to be an attractive place to work too, however. As Gabbi Stopp, executive director of ProShare so rightly said in her opening address ‘as we all work hard to grow the pie, we should also work hard to ensure that everyone gets a bigger slice, not just those with the sharpest elbows.’

ESO is the ideal way in which to ensure that employees have more skin in the game. The challenge, in a noisy, attention-deficient world, is to show people outside the employee share plans industry that ESO can be an inspiring force for good in the hands of employees, their companies, the economy and society as a whole. It is, therefore, incumbent on those in the industry to remind others of its usefulness and power.

The fact that SAYE and then SIP and Enterprise Management Incentive schemes (EMI) were launched 20 years apart from each other strikes me as significant when one considers that, almost 20 years on from SIP’s inception, both the main political parties in the UK are refocusing on employee share ownership. One can only wonder if we are coming to the end of another 20-year cycle where ESO may be about to undergo further changes.

What form those changes may take is up for welcome debate. ProShare continues to play its part in helping to inform and influence policymakers and regulators, talking to Westminster stakeholders right across the political spectrum about EMI and SMEs, millennials, employees on maternity and sick leave and practical ways of helping those who inadvertently face hurdles to their participation in ESO.

Gabbi and her team have also been sharing bigger ‘blue sky’ ideas, such as how to apply and extend the principles and benefits of ESO to help workers and even those employed in the public sector. 

Regardless of the absence of much-lobbied for ESO changes from this year’s Budget, or what makes its way onto the front cover of the Financial Times, what we should infer from this renewed political and media focus is that ownership matters.

More importantly, it matters – not just to the employee share ownership industry, to employees and employers, politicians and policymakers –but to society at large. It is no coincidence that John Lewis and Waitrose have just rebranded with the emphasis on partners and ownership, albeit the indirect kind. This affords the industry the perfect opportunity to break out of its ‘echo chamber’ and deliver a clear, uncompromising message on the benefits of employee share ownership. I hope that this year’s conference, the first one that ProShare has run as part of the ICSA family, has been an opportunity to do just that.

Many thanks to Gabbi and her colleagues for organising such a thought-provoking and informative event. The ProShare Awards on 5 December (proshareawards.libf.ac.uk) will provide another useful networking opportunity for the ESO community.

Simon Osborne FCIS is CEO of ICSA: The Governance Institute

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