Before I started in the role of Program Manager, I had a few assumptions about employee ownership—myths I held without even realizing it. Now, two months into this journey, I am learning what it means to think like an owner, not just an employee.
Working closely with Jennifer has been pivotal in this shift. Seeing employee ownership through the eyes of a Founder has reshaped my understanding of what employee ownership truly is—and what it’s not. Here are a few myths I once believed; perhaps some of these have crossed your mind too.
❌Myth #1: Employee Ownership ≠ Loss of Control
Employee ownership models can vary significantly from one company to another. For instance, a Founder considering an Employee Ownership Trust (EOT) must sell at least 51% of their company, whereas those exploring Employee Share Ownership Plans (ESOPs) have the option to maintain majority or minority control. This flexibility makes employee ownership an attractive choice not only for Founders looking to exit their business but also for those aiming to cultivate a sustainable, engaged workforce that enhances employee retention.
🔍Myth #2: Employee Ownership Doesn’t Necessarily mean Employee Voting Rights
I’ll admit, my initial thoughts about employee ownership were a bit naive—I associated it with government bureaucracy. I imagined a slow-moving process where endless debates hinder progress, and the idea of bringing a diverse group together to reach a collective agreement seemed like a far-fetched dream. I wondered how anything could get done in an employee-owned company if everyone had a say.
However, I quickly learned that employee ownership models can vary significantly. For instance, while Worker Cooperatives may require decision-making among all employees, other models have different governance structures. In these cases, some decisions may need the approval of employee owners, but day-to-day operations and choices remain with management. This allows for effective progress without getting bogged down in the quest for consensus.
💰Myth #3: Taxes
Full disclosure: this isn’t so much a myth as it is my blissful attempt to ignore anything related to taxes. I can hardly stand thinking about my own taxes, let alone the implications for businesses. However, I’ve come to realize that selling to your employees can actually be quite advantageous!
Until 2026, the Government of Canada offers a $10 million lifetime capital gains exemption for Founders who sell their business through an Employee Ownership Trust. Saving on tax 🤝Taking care of your employees – seems like a win-win to me!
💡Myth #4: Only Those Who Understand Business will Succeed as Employee Owners
When I thought of owners, entrepreneurs, founders, and CEOs, I often envisioned BComm degrees, CPAs, MBAs, and suits (👋 hello, unconscious bias!). What I didn’t realize is that employee ownership spans all industries. Attending the National Centre for Employee Ownership Conference in Indianapolis was incredibly eye-opening. I met individuals from diverse backgrounds—truckers, furniture makers, marketers, hot tub sellers, manufacturers, and, of course, accountants, lawyers, CEOs, and founders.
Some attendees were just beginning their journey into employee ownership, while others had successfully implemented models for over a decade. This experience showed me that anyone can be an effective employee owner, but, like anything in life, they need the right tools to thrive. Founders, rest assured—we’re here to support your team’s transition from employees to employee owners.
👀 Myth #5: Employee Ownership is Just an Excuse for Endless Team-Building Retreats in Exotic Locations
I used to think that employee ownership meant packing my suitcase for tropical adventures and sipping cocktails by the beach while “team-building.” But while collaboration and communication are crucial in employee owned companies, the truth is that employee ownership is about empowering individuals to take ownership of their roles and contribute meaningfully to the business’s success. So, while I’m still waiting for that beach getaway (😂), I have discovered a newfound sense of purpose right here at work. Who knew that making a difference could be just as rewarding as lounging in the sun with a cool drink?
Ready to debunk the myths surrounding employee ownership? Let’s uncover the truths together! Connect with us to start your journey toward a tailored succession plan that fits your unique business needs.
