ABSTRACT
Historically, worker cooperatives have been the leading model for workers to obtain control and financial rights in a business enterprise, a business ownership structure that would be today categorized as employee ownership (EO). However, over the last decades, starting with the introduction of the 1974 Employee Stock Ownership Plan (ESOP) legislation in the United States, a new generation of EO has emerged. Although there are variations across countries, the ESOP model has spread internationally, with the number of ESOP enterprises increasing rapidly. In contrast, the cooperative sector has struggled to scale in most countries, with few exceptions. This new generation of EO models share many of the cooperative principles, but on some issues deviate from them; most notably, they generally do not create a democratic governance structure. Concerns exist that these new approaches may overshadow or even dilute the cooperative ethos. In this chapter, we argue that the two worlds are compatible. We argue that the key to the success of ESOPs are certain innovative features, including financial leverage and a separate legal entity, which are instrumental for employee buyouts of conventionally owned businesses. There is growing recognition that such tools could also support the development of the cooperative movement. We explore the practical perspectives of EO conversions, given particular institutional configurations in numerous countries, with the aim of delineating vital resources and gaps toward realizing employee-owned firms in the comparative case studies covered.
