Guest Blog – Should Former Owners Be EOT Trustees?

It is common, especially in the early years of the company being employee owned, for the previous owners to want to be one of the trustees.

The former owners almost always have the best interest of the company at heart. It’s not easy letting go of control, especially when you are being paid out of the future profit of the business.

However, giving up a little bit of control is like being a little bit pregnant. It’s kind of an all or nothing situation.

A former owner who keeps a position of influence is inadvertently sending a message to the employees that is in danger of undermining the concept of employee ownership. It can only dampen the all important employee voice.

The transition to employee ownership is all about the transference of control. Post sale, the employees are now (indirect) owners of the business, and it is likely that the sale will have trumpeted the employees now having a voice.

For many employees, this is as important as the potential access to profit. For employees to really care about the company they work for, they also need to feel that they will be heard.

If the previous owner remains in a position of control, this can generate a feeling that the previous owner is not really giving up control at all, and totally stymie the employee voice.

This is especially true when an owner remains both on the board, and as one of the trustees.

One solution to this can be the use of an independent trustee, perhaps as chair. This sends the message to the employees that the former owner is not in control of the trustees, just one of their number.

Another good tip can be setting a finite term for the former owner, perhaps for the first year in order to ensure the trustees start in the right direction.

In my own case, I found stepping away as a trustee after 6 months to actually be relatively easy. It is important for the employees to see a genuine commitment from the owner to be giving up control.


The Eternal Business Consultancy provides an Independent Trustee Placement Service in partnership with Boardroom Advisors, you can find out more about this service here.

For more information about Independent Trustees and help in acquiring their services, head over to the EOAs Independent Trustee Search page here.


About Chris Budd – Owner, The Eternal Business Consultancy

Chris Budd founded Ovation Finance Ltd in 2000 and sold it to an Employee Ownership Trust 18 years later.

In addition to The Eternal Business, he is the author of several novels, and The Financial Wellbeing Book (the proceeds of which go to the Penny Brohn UK cancer charity of which Chris is a director.

He also helps front the Financial Wellbeing Podcast as part of his objective to change the way we see money from a means in itself, to an enabler of wellbeing.