Challenging the status quo on ownership
IBSI’s mission – to build a more equitable, sustainable, and inclusive society – guides everything we do.
While we are not diving into our Why today, our How is constantly evolving in response to our changing world. And it’s what we ask ourselves when we come to work every day: How can we achieve this mission? This year, we are excited about one answer – our Ownership Initiative.
Between California’s 2021-2022 Promote Ownership by Workers for Economic Recovery (POWER) Act and last month’s meeting of the United States Senate Committee on Health, Education, Labor & Pensions on Empowering Workers by Expanding Employee Ownership, we see increased attention on shared ownership’s potential to improve job security and satisfaction, increase wealth-building opportunities, and contribute to a more equitable society. This has resulted in growing demand for more understanding of shared ownership models – how they work, how to support them, and how they impact business and worker outcomes.
We will be sharing more throughout the coming year, beginning with this introduction through the IBSI lens.
Shared ownership takes many forms
Ownership determines how a business is run and who ultimately benefits from the success of that business. In other words – ownership is power. Traditional business ownership centers around shareholders and maximizing shareholder value, which means the shareholders hold most of the power over decisions related to the business.
Shared ownership models have always been a way of challenging this status quo and are nothing new. These models vary in terms of who makes the decisions and who benefits financially. They include member-ownership – such as credit unions – and foundation ownership (expect to hear more about this from our CRB colleagues). There are also a variety of worker-ownership models, including those summarized in Table 1.
Table 1 – Summary of Worker-Ownership Models from POWER Act Report (2025) |
|||
| Description | Decision-Making | Financial Benefits | |
| Employee Stock Ownership Plans (ESOPs) | ESOPs are federally regulated retirement plans, designed to hold employer stock. ESOPs are often used to create 100% employee-owned companies. | ESOPs can be structured to create democratic worker control; however some employers create ESOPs primarily for tax benefits without providing meaningful worker control. | Workers in ESOPs receive a retirement account that goes up in value based on annual dividends and on increase in underlying share value. |
| Employee Ownership Trusts (EOTs) | EOTs are structures in which a firm is held in a trust for the benefit of its employees. The non-charitable perpetual purpose trust creates a vehicle that can lock a mission and structure into a business. | Governance in EOTs is entirely flexible. EOTs may be designed with or without worker control, democracy, or any other feature. The trust model helps maintain continuity and preserve the company’s mission and values across generations of employees. | Workers in EOTs do not directly own the firm, but trustees can give workers bonuses or other benefits based on the performance of the company. |
| Worker Cooperatives | Worker cooperatives are businesses jointly owned and democratically controlled by the workers. Some states have a specific statute for worker cooperatives. | Each worker has decision-making rights with one voting share and equal voting power. | Workers receive annual profit dividends, typically allocated based on hours worked or labor performed. The underlying share does not increase in value. |
Shared ownership can improve social & economic outcomes, but not always
The support underlying shared ownership models is more than just intuitive, it’s driven by data that shows shared ownership can improve business and worker outcomes.
Berkeley Haas Professor David Levine recently led the POWER (Promote Ownership by Workers for Economic Recovery) Act Report (available here) which provides us with a comprehensive literature review and summary of the study team’s research findings. Highlights include:
- Decision-making and dignity – Workers’ perceived participation or influence in decisions was a key factor in predicting higher satisfaction among worker-owners. Worker ownership is associated with enhanced worker dignity and can reduce discrimination, but maintaining these outcomes can be challenging.
- Job security and stability – Workers experience higher levels of job security in worker cooperatives and other firms with worker ownership. This includes evidence of reduced layoffs as well as increased employment stability in these firms.
- Wages and wealth-building – The data suggests that ESOPs pay equal to or higher than market and industry averages, though the same is not found for worker cooperatives (which may be related to sector of work). Worker-owned firms, primarily ESOP firms, were found to enable workers to build wealth and overall financial security.
- Productivity – Worker-owned firms can achieve higher productivity through increased employee motivation and commitment.
The data suggests shared ownership – certainly worker-ownership – can improve some outcomes and even be good for business. But anyone interested in the power of shared ownership should note that findings are not always definitive or positive. For example:
- Profitability – There was limited empirical evidence on the correlation between employee ownership and profitability or growth, including a firm’s scale of operations, financial value, market reach, and other factors. These challenges were raised in case studies of businesses in low-wage sectors – such as home healthcare and farm contracting.
- Equity – As in traditional firms, women in ESOPs are often in lower-paid support roles, while men are more often in higher-status professional and managerial positions. Black and Hispanic/Latina workers in cooperatives participate less in decision-making, earn lower wages, and possess less wealth in capital accounts compared to white workers.
Findings like this help IBSI and the Haas community understand what we can do to strengthen and maximize the potential of shared ownership.
Opportunities for IBSI and Haas to address constraints and drive impact
IBSI has identified a few opportunities where we can make a meaningful impact in this space:
- Join and contribute to the thought-leadership community: As of June 2025, we became a member of the University Consortium on Employee Share Ownership. We join this community knowing the deep expertise the Consortium brings. We are eager to learn from them and contribute our knowledge.
- Strengthen information sharing and education: We saw demand for more information on this topic – particularly from Haas students – during CRB’s two Spring 2025 events and are planning more events in 25-26.
- Identify opportunities to research and learn: We are curious about how changes in regulations, incentives, funding, and resources may support the creation of and conversion to shared ownership models as alternatives to the traditional models and address previously identified limitations. We’re looking for opportunities to research how to 1) support creation of and conversion to shared ownership when appropriate and 2) measure the impacts of shared ownership on social & economic outcomes.
Join us as we take a deep dive into this topic throughout the 2025-2026 school year. There is so much to discover, learn, and share together.
