This week I will focus on the workforce element of the B Impact Assessment and organizational performance. The structure of a company can be used as a powerful vehicle for impact creation.
In a recent study, employee stock ownership plans (ESOPs) were shown to reduce wealth inequality, specifically narrowing gender and racial gaps2. The study conducted by the Rutgers Institute of Employee Ownership and Profit Sharing concluded that ESOP accounts provided values ranging from $15,000 to $6 million, with a median of $165,000 for low/moderate income employees2. There are many options for sharing company ownership, including employee stock options, co-ops, stock options, and phantom stocks. Choosing your B Corp certification’s correct option can provide virtuous cycles of social impact for your employees and your community.
Here are a few critical thinking questions to help you decide if an ESOP strategy is right for your business.
- Does the size, industry, business stage, and complexity of my company support the use/need for an employee stock ownership plan?
- What are the potential benefits of an ESOP strategy? What are the potential downfalls?
- What changes to my organizational unit will need to be made to support an ESOP strategy?
- Do the goals of my employees align with the positive outcomes of an ESOP strategy? How will my employees change if they become employee-owners?
If you are interested in pursuing a B Corp certification, contact me today for your free consultation. Reconfiguring for new sources of growth and competitive advantage can be a daunting process! However, with the help of experts, your business can achieve the performance levels you have always dreamed of!
Driving sustainability and future growth,
- Moore, K. (2019). The Ultimate Company Benefit: Employee Ownership. Oregon Business Magazine, 42(3), 43.
- Rutgers School of Management and Labor Relations. (4 C.E. 2019). Study: Employee Ownership Narrows Gender and Racial Wealth Gaps. Business Wire (English).