The Devon-based property company Kivells, founded in 1885, has adapted its corporate structure and implemented a hybrid Employee Ownership Trust (EOT) model. This strategic shift combines aspects of employee participation with the retention of existing shareholder control. The new model is intended to allow employees indirect involvement in the company, while the current management and governance structures remain unchanged. This development reflects a growing trend where companies seek to involve their employees more closely in the company's success without compromising proven management.
The concept of an Employee Ownership Trust is gaining increasing importance in the UK as a mechanism for business succession planning and fostering employee loyalty. By establishing such a trust, company shares are held in trust for the employees, which indirectly gives them the opportunity to participate in the company's success. In the hybrid model chosen by Kivells, this approach is combined with a continued strong presence of the original shareholders. This ensures a stable transition phase and the continuation of the established corporate culture.
Advantages of the Hybrid EOT Model
The introduction of a hybrid EOT model offers several advantages. On the one hand, it strengthens employee motivation, as staff directly benefit from the company's success, which can lead to increased productivity and loyalty. On the other hand, it allows founders or previous owners to gradually withdraw from day-to-day operations or reduce their stakes without completely selling off the company. This ensures the long-term stability and independence of the business. For Kivells, a company with over 130 years of history, this is a significant step towards securing its future and valuing its employees.
The model can also help preserve the company's identity and values. Unlike an external sale, where there is a risk of losing the corporate culture and philosophy, the character of the company often remains intact with an EOT model. Employees are typically keen to continue the traditions and standards they have helped build over the years. This hybrid model is therefore a clever way to combine the experience and knowledge of existing management with the commitment and energy of the entire workforce.
Impact on the Devon Property Market
Although the EOT model primarily has internal effects on Kivells as a company, it can also enhance the company's attractiveness as an employer in the local property market in Devon in the long term. Increased employee satisfaction and retention can lead to lower staff turnover and thus ensure the continuity and quality of services for clients. Kivells, as an established player in the region, is expected to continue to play a key role in local property transactions, strengthened by the now embedded employee participation.
- —Securing business succession while preserving identity.
- —Strengthening employee loyalty and motivation through direct involvement.
- —Retention of established management structures and governance arrangements.
- —Potentially positive impact on service quality and customer relationships.
