This is the conclusion of new a report compiled by a group of co-operative and mutual trade associations, including the Building Societies Association (BSA), which was published yesterday.
It argues the model of shareholder ownership had become dominant – a default for UK business – but this must be broadened out to represent those organisations which don’t purely exist to make money, but seek to meet the needs of society.
It said ‘meaningful change’ in the institutions which shape business was needed and it called for ‘greater appreciation and consideration’ of different organisational forms.
The groups involved, which also included the Association of Financial Mutuals, Co-operatives UK, The Employee Ownership Association and Social Enterprise UK, said they could play a leading role in reinvigorating communities, especially those left behind by economic or social change.
The research took into account two surveys which provided fresh insights into how workers viewed their own organisation’s purpose and how it delivers for different groups in society.
And it touched on research which showed how consumers preferred to use businesses which had a strong record for good conduct. This is a sentiment which has deepened since the pandemic.
It looks at how business could benefit by switching from ‘profit-focussed’ to a ‘people-focussed’ approach and how ownership shapes culture and the delivery of purpose as well as the business environment needed to support growth of different types of firm.
Mike Regnier, chief executive of the Yorkshire Building Society and chair of the Building Societies Association, said: “The Covid pandemic has brought out the best in people and their communities, and we need to facilitate the development of institutions that embrace this spirit.”
“By building on their heritage of democratic ownership, cooperatives, mutual, employee-owned firms and social enterprises can integrate communities and play a leading role in securing a more sustainable economic, social and environmental future for all.”
Achieving the goal
The report outlined three key approaches to achieving the goal of greater diversity:
- Creating an enabling environment for forms of business ownership beyond shareholder owners
- Providing an option for businesses that are seeking to recapitalise after the Covid pandemic to introduce employee or customer ownership, including repaying Government support out of future earnings
- Supporting community-led economic development, particularly in the hardest-hit regions, to engage local people in incubating new forms of wealth creation which would support the Government’s ambitions to “level up” different regions.
Lord Adebowale CBE, chair of Social Enterprise UK said: “The challenges we face in rebuilding society after this global pandemic alongside the need to tackle the climate emergency means we have to change business as usual.
“The UK has been a global leader in developing new forms of business from cooperatives and building societies to social enterprises. We need more of these businesses if we are going to bounce back quickly and fairly from Covid.
“This report provides Government with a number of recommendations on how this can be done and I hope that these businesses will be at the heart of Britain’s economic fightback from Coronavirus.
