The May 2025 Employee Owners Knowledge Share focused on the topic: Effective Trustees and Board Dynamics. We were fortunate to be joined by guest speaker Sue Lawrence to discuss this topic, and below we share our three key takeaways from the discussion.
Effective Trustees and Board Dynamics
Everything changes and nothing changes when a business becomes employee owned. The business still delivers the same function but ‘who is in charge’, ‘who is responsible for what’, and ‘what aren’t individuals or forums responsible for’ might have shifted.
Without a clear governance structure and its communication, the changes that do take place can be taken for granted by a few, confusing or unclear for some, and potentially unknown by many. Not only might employees think differently to how the business needs them to, but they might also behave differently. Equally the expectations of board members, trustees and employee representatives may not align to the roles, responsibilities and authority that is assigned to them.
When those people are board members, trustees, or other representatives for employee owners, it can lead to sub-optimal internal dynamics and be detrimental for the business. What can be done to improve internal interactions to ensure effective employee ownership and representation?
Sue Lawrence joined our May knowledge share. Sue is a Chartered Director, Non-Executive Director, Independent EOT Trustee, and the founder of Independent Directors & Trustees Ltd, a network of independent EO trustees working throughout England, Wales and Scotland. Sue works with and supports trustees and EO companies across multiple sectors, sizes and stages of EO, including the 1st Canadian EO company earlier this year.
Our three key takeaways from the May knowledge share are:
1. Importance of governance
Governance defines who does what. To have that shared single narrative for all in a business can provide clarity and increase efficiency.
In an employee owned business the trading company board still leads the business operationally; they make the big decisions. The Employee Ownership Trust (EOT) is the shareholder, and has the right to hold the trading board to account, but the EOT is not there to run the business. Rather it is there to give the Board confidence, encourage them to make the right decisions, encourage them to delegate and evolve the business under the new ownership structure.
Without clear governance, the trading company board, the EOT and the employees might all be pulling in separate rather than collective directions.
The trading company board should also remember that good governance includes sharing information with employees. It can be easy for directors to overlook the fact that, just because they know something, doesn’t mean the employees know it – directors should regularly consider what information needs to be communicated out to employees to keep them motivated and focused on the business’ strategic direction.
2. Understand and support the trading company board to build a dynamic of trust with the EOT
If a business is being run well enough to enable a sale to an EOT then it is likely that the trading company board have been successful in their roles to date.
When the ownership structure changes and they have new shareholders it is likely that they are going to experience a range of new emotions. They might feel potentially undermined that they now have a new layer of expectation. They might be nervous if they feel they are going to be monitored by the Trustees. And they might feel uncomfortable not knowing as much about employee ownership as some employee owners might demand.
The EOT should support the trading company board through their transition to facilitate short and long-term success, and in doing so build trust.
3. Unlock employee voice and potential
Another great benefit to unlock through employee ownership is that of employee voice.
The trading company board and the business can directly benefit from engaging the workforce, and that can make employees feel more like owners when their voice is heard and their input is engaged with.
It’s very possible that employees hold the answers to challenges the trading company board face as they might spend more of their time operationally in that space. Directors should not see suggestions from employees as a criticism, but actually welcome it as insights to help them run the company even more successfully.
Consider asking employees to solve challenges the board are grappling with, set up single-topic working groups to drive forward an objective including a broader breadth of perspective.
Many EO businesses use the roles of Employee Councillors and Employee Trustees as a form of ‘leadership accelerator’ to prepare the employees for the step up into management of the business.
Stephens Scown hosts the Employee Owners Knowledge Share monthly to help create a community space for employee owners, and those looking to transition. If you are interested in joining future sessions, please visit our Events page.
This article was co-written by Dave Robbins (Associate in our Corporate team) and Sam Moles (Digital and Personal Brand Specialist & Employee Ownership Advisor) who are both former employee ownership trustees, and currently sit on the firm’s Strategy Board.