How to Democratize Corporate Ownership

Q: What’s a good way to incorporate my employees into company matters, from decision-making to ownership, regardless of their status or seniority?

A: Equal Exchange, the oldest and largest for-profit Fair Trade company in the US, is owned and governed by the employees on a one-person/one-share/one-vote basis. After one year of service, an employee is eligible to become an owner. At that time he or she may, and must, buy one share of Class A voting stock, which grants each employee one vote in matters presented to the worker-owners, without regard to rank or seniority.

In addition, the cooperative has a participatory governance structure that allows any worker-owner to make proposals, call meetings, run for office, nominate others for office or introduce agenda items. Transparency is designed into the operations of Equal Exchange through open book management, which includes on-going financial literacy training for all staff, open Board meetings and shared Board meeting minutes, and bi-monthly all-staff meetings.The worker-owners' list of "Rights & Responsibilities" guarantees the right, among others, to publically raise issues and express opinions in co-op forums.

The employees at Equal Exchange nominate and elect the Board Directors, and non-executives hold six of the nine seats. The company's executives do not sit on the Board, but rather answer to it. This structure gives the Board true authority over management, and through the election process, the worker-owners hold the Board members accountable. Workers are held accountable through traditional management authority over hiring and firing.

“Some may ask us why we’ve brought democracy into the workplace," explains Executive Director Rob Everts. "To them we ask, 'Why have you kept it out?' Democracy, wherever it can take hold, does not need to be justified. Equal Exchange was structured democratically from the very beginning in 1986 because the three founders knew, and profoundly felt, that everyone wants and deserves a degree of self-determination, and that in turn, requires a rational, fair way to share power with others. They wanted that for themselves and could not justify denying it to the others who would one day work at Equal Exchange.”

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