Partnership benefits

A prime mover in bringing energy efficiency to poorer households, eaga sees its unusual partnership structure as an indispensable aid to achieving its goal, says John Clough, eaga's CEO

by John Clough, eaga
Last Updated: 23 Jul 2013

Eaga's entry to the stock market in June this year and its subsequent FTSE-250 status as a leading ‘green' support-services business has enhanced its ability to make a difference. It operates in the space where environmental, energy and social justice concerns meet and homes across the UK are made more energy-efficient and sustainable. In an organisation that takes much of its values and traditions from its origins as an employee-owned partnership, we regard CSR as not just part of the business or on the periphery of our operations but an intrinsic part of our culture.

Since its inception in 1990, eaga has improved living conditions and lowered fuel bills in five million homes by installing energy-efficiency measures.

It brings improvements to more than 1,000 UK homes every working day and fits or improves a heating system every minute of each working day. These improvements have been at the heart of the Government's drive to eradicate fuel poverty, where a household cannot afford to maintain an adequate standard of warmth in the home. Eaga's path to the stock market was different from that of most of its rivals. Established in Newcastle in 1990 with just three employees, it was a non-profit-distributing organisation for 10 years, leading government-funded efforts to improve living conditions for vulnerable families. It became a staff-owned partnership in 2000, and since 2004 has grown, organically and through acquisition, and strengthened its focus on improving the environment, increasing energy efficiency and delivering social and environmental justice.

The Government is striving to implement a policy framework to deliver its climate-change goals. Realising the synergies available, as social and environmental policies converge, is eaga's expertise. Providing affordable warmth for cold homes while safeguarding the future of the planet - that's what engages its partners.

As a founder member of the Employee Ownership Association, we know that staff share-ownership is fundamental to effective employee relations. It fosters the high standards of accountability and CSR that are integral to eaga's position. As shareholders, its employee co-owners impose exacting levels of corporate transparency and integrity in everything eaga does.

Partnership brings tangible business benefits. Eaga's experience and research show that firms with this structure often demonstrate higher productivity, greater innovation and enhanced talent recruitment and retention, as well as enjoying greater customer loyalty. But the approach needs to be underpinned by a strong culture and values. Eaga's employee-partners know that it places a huge emphasis on the selection and induction of people who share its ethos and values.

All new employees attend an induction programme to ensure that eaga's values are enshrined in their working practices. Being a plc has brought opportunities for growth from which all eaga partners will benefit. Of course, life as a plc also brings challenges - for example, new rules and regulations and increased scrutiny from the media. But partnership is, in eaga's view, the best way to meet these challenges. It will allow us to maintain our standards, retain engaged, passionate people and to raise our game. It's a tried and tested model that partners understand, trust and benefit from. Since flotation, they continued to hold more than 51% of company share capital through a combination of personal ownership and the eaga partnership trust.

The company's board resolved in June that its operations throughout 2007-2008 would be carbon-neutral, and it would move progressively to a carbon-negative status. As well as reducing our own impact on the environment, we are seeking to help stakeholders achieve carbon savings. Eaga has the business model, the ownership structure, the culture and the people to deliver a strategy that is about doing well by doing good.

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