by Vikas Vij - Employee ownership business models have increasingly attracted attention since the financial crisis of 2008 when corporate governance came to be recognized as a critical element to a company’s long-term survival. In the UK, the number of employee-owned companies has been rising at an annual rate of 10 percent; the U.S. is not too far behind with an annual growth rate of six percent.
John Lewis Partnership, which owns the UK grocery chain Waitrose, is an outstanding example of a company that has created a unique governance system where each of its 91,500 employees is a partner and gets a voice in the business they co-own. At John Lewis Partnership, founded in 1928 on the principles of co-ownership, corporate conscience andgovernance have been way ahead of their time.
High standards of corporate governance are at the heart of the Partnership. Its structure gives the management the freedom to be entrepreneurial and competitive in the way they run the business for long-term success, while giving the company's owners, the Partners, the rights and responsibilities of ownership through active involvement in the business, and have a share in its profits.
All Partners have a say in how they run the business and this is set out in the company’s Constitution. Freedom of speech is guaranteed through PartnerVoice, which is the local avenue for Partner opinion and is the means by which Partners can provide feedback, question management on branch matters, raise their own issues and be consulted.
John Lewis Partnership’s 2016 Annual Report and Accounts highlight the company’s sustainability achievements, including its exemplary performance in managing its own people. The company’s 91,500 Partners (employees) received a bonus of 10 percent– equivalent to more than five weeks’ pay.
The Partnership has strengthened its governance arrangements with the appointment of a sub-committee of the Board – the Corporate Responsibility Committee. This Committee will make recommendations to the Board in respect of the Partnership’s Corporate Responsibility policy and objectives.
The annual report showcases the company’s targets, priorities and achievements in 2015-16. It made an investment of £12,225,309 in community organizations, equivalent to four percent of pre-tax profits. The report also covers the company’s responsibilities to customers, suppliers, the environment and communities, and includes ‘Principle 1’ at its center – ‘the happiness’ of its employees or ‘Partners’.
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