“The Awkward Squad never retire”. How do worker co-ops and employee owned businesses deal with retirement?
In episode 2 of the hit BBC drama Baker Boys a key character, Gwynfor, has taken the hard decision to retire early. In Gwynfor’s case he knows that there is not likely to be any immediate return on his investment in the Valley Bara Co-operative as the Bakery is struggling – but what happens in a real worker co-operative or employer owned business when an owner / employee chooses to retire?
Retirement – What does this mean for shareholding / board membership / future involvement?
When a member of a worker co-operative retires, they would usually sell the shares they hold in the business. Many worker co-operatives clearly state in their rules that only current employees can hold shares in the business, so when a member retires it would signal the need to sell their shares, and usually the time frame within which the shares should be sold. They would normally offer the shares in the first instance to the other employees in the business. If no one wants to buy the shares, the business can buy them back. The business’ accountant would agree on the value of the shares at the time of the sale. If the retiring employee has very specialist knowledge which is critical to the business, the business may wish to appoint him/her to the Board of Directors as a non-executive board member so they can still make a contribution to the business’ future.
The Wales Co-operative Centre was set up thirty years ago and ever since we’ve been helping businesses grow, people to find work and communities to tackle the issues that matter to them. Our advisors work co-operatively across Wales, providing expert, flexible and reliable support to develop sustainable businesses and strong, inclusive communities.