Trust in business is low. Not as low as it was as the depth of the financial crisis, and not as low as public trust in politicians, but low all the same.
Our latest research into the health of the UK's co-operative sector shows that only 12% of people trust business and only 7% see them as honest. People think the economy is out of their control and businesses appear to be seen as an unaccountable part of that.
Something has gone wrong here. If people don’t trust business they are less motivated to start and grow one, and less open to innovation. Yes, businesses can do good - and often do. The origin of the word ‘company’ is, after all, people working to achieve something together.
We need to rebuild trust in business in a way that lasts longer than the next scandal or crisis, and embeds long term trust in business in the minds of Britain’s people.
There are lots of ways to rebuild trust – and an important one is to give people a stake in the businesses they use, work for, or supply to. This is where co-operatives come in. If we widen business ownership, then we widen trust in business.
Co-operatives are businesses owned and run by the people closest to them – customers, staff, suppliers, local communities. They are an important part of the UK economy – our figures show there are 7,000 of them turning over a total of £34 billion a year, working in everything from housing to retail.
By giving people a say in how the business is run, co-ops aren’t just organisations that people choose to trust in or not, they are their businesses run by and for them.
Take customers. Dissatisfaction with shops and services is widespread. 62% of people want to have more of a say over the businesses they use. Co-ops which are owned by their own customers are a way to do this.
When customers are the members of the business they are able to have some input into its decisions, from small choices about stock and where to allocate surpluses to strategic decisions on the future of the business.
Customer owned co-ops are big business, turning over a total of £13.9 billion last year. They show the mix of member participation and commercial performance that characterises co-operative business.
One need only look at the refreshed Co-op, with a new brand and focus on giving its members a voice and a better deal, to see that co-operative ownership is a way to bring customers closer to business.
Take staff. 68% of people say they have no control at work, a figure that rises to 75% for part time workers. Imagine an organisation where the employees have a voice, a stake, where they own and control the business together. Evidence is mounting that businesses owned and run by their staff – from John Lewis to Suma Wholefoods - are more productive than other businesses. It is the involvement and care that comes from worker ownership that makes the difference.
Or look at small business. Small firms supplying large ones often find themselves dealing with uncertainty around contracts and invoices. There is an approach, though, where small businesses can have a say in the businesses that they are supplying or relying on for a service.
Arla Foods, for example, is owned by the 3,000 dairy farmers across the country who supply it milk, meaning they direct the business, have a guaranteed buyer for their milk and a powerful business working to boost their bottom lines. In this way, the large co-operative is able to help the small businesses which own it to reduce their costs and uncertainty while directing what the business does.
Importantly, at a time when there are fewer individual shareholders of UK listed companies than at any time over the last thirty years, the country’s co-ops are owned by a record 17.5 million people, meaning that they are giving more people a say in the businesses they and work for than ever before.
If we don’t want business to become a minority sport then we need more of this – more businesses giving more people a say in what they do. Co-operation can help rebuild trust in business.
Ed Mayo is Secretary General of Co-operatives UK, the network for Britain’s thousands of co-operative businesses. It;s latest report, The UK co-operative economy 2016, is published today.