ICYMI: Reporting on Recent Employee Ownership Events
Summing up the inaugural Stewards Circle and Transform Finance's latest webinar on investing in alternative ownership funds
Last week in Frisco, Texas, the inaugural Stewards Circle for 2024 drew together an assembly of visionary business leaders representing over 1,000 employees, according to Common Trust’s press release on the event. The gathering served as a forum for robust discussions on vital topics shaping the future of American business.
At the heart of the dialogue were profound conversations surrounding the implementation of Employee Ownership Trusts (EOTs) and Perpetual Purpose Trusts (PPTs), underscoring the enduring commitment to long-term employee ownership and stewardship. Participants delved into the transformative potential of community-driven initiatives and the profound impact of sharing success across diverse industries.
Central to the discourse was the looming “silver tsunami,” a term describing the imminent wave of retirements among business owners. This impending demographic shift looms large, necessitating proactive strategies to ensure continuity and sustainability in the business landscape.
The participants, including Ocaquatics Swim School, Text-Em-All, Optimax, and Clegg Auto, came from a wide range of industries.
In a LinkedIn post, Common Trust shared some of their insights on the future of business ownership and employee engagement. “As we stand on the brink of a generational shift, where 3 in 5 small businesses look towards transition, the group at Stewards Circle 2024 demonstrates the massive potential of trust ownership to redefine success, community, and legacy.” You can read more from Dr. Hand about Stewards Circle here.
On April 3rd, 2024, Transform Finance hosted a discussion on investing in alternative ownership enterprise funds. The panel included Demetric Duckett, Managing Partner at Known; Humaira Faiz, Mission Investment Officer at W.K. Kellogg Foundation; Thomas Knowles, Managing Partner of Gratitude Railroad; and Ishita Shah, Director of Catalytic Capital at Align Impact.
Transform Finance’s Curt Lyon kicked off the conversation introducing the topics at hand, which included delving into investments in alternative ownership enterprise funds, exploring how enterprise models can serve as catalysts for mitigating the racial wealth gap, and discussing financing options for conversions.
Prior to delving into the discussion among the four panelists, Curt provided a brief overview of Transform Finance, founded approximately a decade ago, and which operates as a research education, and implementation partner within the finance transformation movement. Anchored by three core principles—community, control, and governance—the organization endeavors to transcend traditional financial paradigms. They work to add more value than what investors are extracting and also work to balance risks and returns fairly across stakeholders.
Julie Menter of Transform Finance also shared how Transform Finance defines alternative ownership enterprises, firms that significantly shift economic value and decision-making power toward the non-investor stakeholders they impact such as workers, consumers, producers, members, or even nonfinancial purposes. According to Julie, there are a dozen models of alternative ownership enterprises that encompass a broad range of approaches.
Some of the key points from the panelists:
Introducing Align Impact, Ishita Shah shared that alternative ownership models are a core part of what wealth means for an individual or a household. She asked how a family could build savings and assets for retirement even as they attempt to break intergenerational poverty traps, and argued that employee ownership could play a significant role in establishing financial stability.
Humaira Faiz introduced the W.K. Kellogg Foundation, which she said has a deep commitment to racial equity. She said children, families and communities are at the heart of everything they do. She also discussed research that shows the current economic system is not working, especially for employees of color and their communities. She said employee ownership is one answer to this issue.
Demetric Duckett introduced himself as Managing Partner at Known for Living Cities. He primarily focused on answering the question of how we might close the racial income and wealth gaps. He said one of the ways is through alternative ownership enterprises. He pointed to several models that have led to remarkable outcomes for lower income populations.
Thomas Knowles introduced himself as Managing Partner of Gratitude Railroad, which works with individuals and families coming from traditional finance and business and entrepreneurial endeavors. He said they work off these models and experiences and primarily invest in venture and private equity. He said business owners ask questions about what will happen to their employees, communities, and the mission of their organizations, questions that alternative ownership can address.
If you’re interested in hearing more about this conversation, watch the video linked above!