Worker share ownership schemes important to economic transformation

President Cyril Ramaphosa says giving workers a seat at the table where strategic corporate decisions are made fosters good morale and innovation and also builds a resilient economy.

The President said this when he delivered the keynote address at the inaugural Worker Share Ownership Conference held in Johannesburg on Tuesday.

The conference serves as a platform for advocacy for Employee Share Ownership Plans in private companies.

“This conference is an opportunity for meaningful dialogue among a diverse array of participants, including trustees, CEOs, labour and business representatives, and company chairs. It is an opportunity to develop a model of worker ownership that can serve the needs of our economy.

“When workers participate as owners, the workers also develop a deeper understanding of the challenges and opportunities that face their own companies, enabling more fruitful partnerships to unlock opportunities for growth, investment and job creation.

“This is a paradigm shift, which aims to empower workers not only as wage earners but also as partners, as stakeholders with ownership in capital,” he said.

President Ramaphosa added that beyond social justice “worker ownership initiatives make sound business and economic sense”.

“They are key to building a more resilient economy whose benefits flow equitably through society. Worker share ownership initiatives boost morale and productivity.

“Workers who feel valued and respected by their employers are more likely to contribute ideas for improving processes, products and services. It is human nature that one is more inclined to contribute one’s best efforts when one has a vested interest in the success of that particular venture,” he said.

Economic transformation

The President emphasised that government has done much to improve transformation of the economy following devastating apartheid legislation which deliberately excluded black South Africans from “participating meaningfully in the economy of their own country”.

The democratic government has done this through enacting laws in competition to bolster small and medium-sized enterprises, introducing labour legislation to ensure decent working conditions and the promulgation of the Broad-Based Black Economic Empowerment (BBBEE) Act.

“Yet, despite the measures of successive democratic administrations that we have introduced to transform patterns of ownership in the economy, we still have much more to do.

“This is therefore a good time to collectively assess the impact of the enabling legislative environment to examine the learnings over the past two decades. A vital measure of economic empowerment is the extent to which ownership and control of the economy is broadened, particularly among black and women South Africans.

“Worker [share] ownership schemes are valuable instruments to broaden ownership and, with time, to enable greater control of the economy. Also known as Employee Share Ownership Programmes, these schemes are underpinned…by the [BBBEE] Act, together with the Competition Act, the Companies Act and the various number of others,” he said.

Shared commitment

The President highlighted that government plays an important role in providing guidance on the design and implementation of these programmes through the Department of Trade, Industry and Competition and also provides catalytic funding through the Industrial Development Corporation, the National Empowerment Fund and others.

He added, however, that a shared “commitment to economic transformation” is imperative.

“It is vital that we harness the spirit of partnership as we chart the course for the future of these programmes and for an even better, more sustainable worker shareholder regime.

“By championing worker ownership, we are building a future where every employee has a stake in the success of their company. Together, we are paving the way for a more equitable and prosperous society in which no-one is left behind,” President Ramaphosa said. – SAnews.gov.za