Bret Keisling discusses an interesting new article published in the Stanford Social Innovation Review called It’s Time to Put Employee Ownership on the Inclusiveness Agenda, by James Boomgard, president and CEO of DAI Global.
Mini-cast 123 Transcript
Bret Keisling: 00:03 Welcome to the ESOP Mini-cast. Thank you so much for listening. My name is Bret Keisling and as it says on my business cards, I'm a passionate advocate for employee ownership. On February 23rd, 2021, the Stanford Social Innovation Review, part of Stanford University, published an article called "It’s Time to Put Employee Ownership on the Inclusiveness Agenda." It's an interesting and well-written piece by James Boomgard of DAI Global, which is an employee owned company with projects and developmental enterprises in over 130 countries around the world.
Bret Keisling: 00:47 We're going to include a link to the article in our show notes, and I hope you'll check it out for yourself. It's not particularly long, but it raises a lot of interesting points.
Bret Keisling: 00:58 Before I give you a brief summary. I'd like to point out that we all benefit any time employee ownership is discussed in academic and scholarly journals. As you already know, employee ownership addresses many great societal issues and we all work hard to increase employee ownerships traction.
Bret Keisling: 01:16 It's very important to increase our presence in academia. Often what is taught in the classrooms today can become policies tomorrow. So I appreciate the Stanford Social Innovation Review including this article in its journal.
Bret Keisling: 01:32 Now by way of summary, the sub-headline of the article is, "To be laboratories of a more inclusive prosperity, American companies need to try new ways to help workers share in the fruits of their labor, and they need the space and freedom to experiment." This, to me, invokes a couple of the most important themes of employee ownership. When we talk of inclusive prosperity, it often goes unsaid that employee ownership has been proven to increase business profitability and sustainability. It also reflects the belief that employee owners can make the business more profitable then they should share in the benefits.
Bret Keisling: 02:10 In the article. Jim makes the point and I quote, "For any policy maker seeking to address growing inequality, racial wealth disparities, simmering discontent with free markets, or the looming retirement challenge, expanding employee ownership should be a priority." Unquote. This certainly mirrors the views of many of us.
Bret Keisling: 02:33 But then Jim Boomgard and DAI Global have put these ideals on steroids and applied them internationally.
Bret Keisling: 02:42 DAI Global was founded in the early 1970s. The founders and original shareholders worked closely with the business and in 2006, they created an ESOP. DAI Global is a really interesting company. It provides services around the world related to agriculture, health, economic development, access to credit, and many related infrastructure needs in some of the most challenging areas around the world.
Bret Keisling: 03:10 If you go to their website, and we'll include a link to that in our show notes as well, you're going to see the amazing work that it does. And I'm not overstating it when I say they are working to improve humanity wherever they find it.
Bret Keisling: 03:24 As you know, ESOPs are a creation of the United States Congress. Although there are other forms of employee ownership internationally, ESOPs are unique. In 2013, DAI Global purchased a British firm and it soon learned that the ESOP structure was untenable because international employees weren't eligible to participate.
Bret Keisling: 03:45 This is when DAI Global began to address the EO inclusiveness
agenda, which is the theme of the Stanford review article. They developed a model of broad-based 100% employee ownership retaining the ESOP as a legacy benefit for US employees, but also permitting employees inside and outside the US to directly purchase equity in the firm.
Bret Keisling: 04:09 In 2016, they launched the global employee ownership model, which is similar to stock grants or employee stock purchase plans. They provide a cash grant, currently at $2,000, for new employee investors to establish a share account and active employee owners are eligible for a global performance bonus calculated on a per share basis.
Bret Keisling: 04:31 As a result of its efforts, direct employee ownership is broad-based and more than 80% of eligible employees now shares.
Bret Keisling: 04:51 There are a lot of takeaways from the article by Jim Boomgard and when you check it out, you'll have your own. For me, the overarching message is that there is no one size fits all. And while many US-based companies may be perfectly suited for an ESOP, co-op, or collective, there are certain limitations internationally and with global employees that [DAI] Global has found an impressive and proven way to address.
Bret Keisling: 05:16 So I appreciate Jim Boomgard for writing the article and the Stanford Social Innovation review for publishing it. Jim has an amazing background and I didn't really do justice to either the article or to DAI Global. So we're going to do our best to invite Jim to come on a future episode of our long form EO/ESOP Podcast.
Bret Keisling: 05:37 Remember there's an awful lot of good in employee ownership going on in our communities and all around the world. All of us are going through a lot together right now, and that's how we'll get through it -- together. And that's in the best spirit of employee ownership. Thank you so much for listening. This is Bret Keisling; be well.
Bitsy McCann: 06:03 We'd love to hear from you! To contact us, find us on Facebook at KEISOP, LLC and on Twitter @ESOPPodcast. To reach Bret, with one "T", email Bret@KEISOP.com, on LinkedIn at Bret Keisling, and most actively on Twitter at @EO_Bret. Again, that's one "T". This podcast has been produced by The KEISOP Group, technical assistance provided by Third Circle, Inc. and BitsyPlus Design. Original music composed by Max Keisling, archival podcast material edited and produced by Brian Keisling, and I'm Bitsy McCann.
Standard Disclaimer: The views expressed herein are my own and don't represent those of my own firms or the organizations to which I belong. Nothing in the podcast should be construed as guidance or advice of any kind in any field and the fact that I mentioned an organizational website or an advocate or a company on a podcast does not reflect an endorsement, but if you've heard your name or your group's name mentioned on this podcast, I'd love to have you come on and talk about it yourself.
A note on the transcript: This transcript was produced by Temi, an automated transcription service. While it has been reviewed by The ESOP Podcast, we can not guarantee the accuracy of the transcription. Please refer to the original audio when citing sources.