On Employee Ownership

In September 2021 I took a call from a company interested in buying the communications agency I had founded and was running. I was just back from maternity leave with my second child and such a transaction was far from my mind. We didn’t move forward – the match wasn’t right, and nor was the timing. But it got me thinking: did I want to sell the business, and if so, who to? How long did I want to stay on as CEO? 

Fast forward a year or so, and I started working with a coach, Simon North, who introduced me to the concept of Employee Ownership Trusts. I was immediately excited by the prospect of passing on the business to the employees, while ensuring – as far as possible – that it would continue to work for the sorts of organisations and on the sorts of issues that had inspired its creation. 

The way employee ownership works is that as the exiting founder, you sell the business to a Trust, which holds the shares on behalf of the current employees. The business is valued by an independent third party and you get paid off over a period of years from future profits (sometimes with an upfront payment if there is enough in the bank to facilitate that). Once the debt is cleared, any profits are shared between the employees – giving them a real stake in the success they have helped create. 

There are certain rules in place that you have to follow for the sale to be legal, and to benefit from preferential tax treatment (as of November 2025, 50% of the profits are free from Capital Gains Tax, and the employees also get a proportion of any bonus tax free) but apart from that you can do employee ownership in whatever way suits you. 

I know people who have waited to sell until they are ready to step down – essentially aligning the sale and their exit exactly. Others who have sold but stayed on, continuing to play a role in the business, but relinquishing sole ownership. In my case, I sold and stepped down 22 months later, having been working with the team to set the business up to keep thriving in my absence. 

It was and continues to be an inspiring and thought-provoking journey. For employee ownership to work, it has to be more than a paper transaction. The shift needs to involve the staff stepping up, shifting their way of thinking and taking more responsibility for the success of the business as a whole. And as the leader and former owner, you also need to be prepared to change; to let go of your autonomy and welcome others in, while retaining clear decision-making processes, communication, hierarchy and strategy. 

Chris Budd has written a great book, The Eternal Business, on some of what it takes to sell a business to the employees. And Torchbox, a digital agency, have done some excellent blogs and a video about their employee ownership journey. Baxendale, a consultancy, helped us with the planning and the transaction, and continue to provide really useful advice.  

I now chair the board of di:ga’s Employee Ownership Trust, working alongside a nominated employee and an independent trustee to support the leadership team to design and implement the strategy, and manage risk. It’s an exciting chapter: watching the business grow and evolve under new leadership, and changing my relationship with it and the staff. 

If you are interested in finding out more about employee ownership or leadership change in a purpose-driven organisation, I’d be happy to have a chat!

1 December 2025