Employee share ownership schemes can make a difference to performance - if they are combined with participatory management.
Recent months have seen a resurgence of interest in employee share ownership. One reason is the election of the Labour government, which explicitly backed employee share ownership plans, or ESOPs, in its election manifesto, and which is expected to encourage them, through tax provision, possibly in the next Budget. Another is the launch of the UK Employee Ownership Index. Devised by Capital Strategies, a corporate finance house, the index measures the performance of 30 companies with more than 10% of issued capital held by or for employees (other than board directors). In April, it showed an 89% outperformance against the FTSE All-Share Index over the period from January 1992.