Richer Sounds becomes an employee-owned trust
Richer Sounds, a UK audio and visual equipment retailer, has become an employee-owned trust after its founder handed over 60% control to his staff. Julian Richer, who founded the chain 40 years ago, was previously the sole shareholder of the company but has transferred the majority of his shares to the chain’s 500+ employees.
To qualify as employee-owned, a company must be either entirely or significantly owned either by the individual staff members holding shares or through a trust. A board is still in place to steer the company, but employees have a significant say in operations and company strategy.
The main benefit of running a company this way is that long-term decisions can be prioritised over short-term payments to external shareholders who may have no interest in the wellbeing of the company or its staff. In addition, the workforce at an employee-owned company benefits financially from any profits the business makes. In the case of Richer Sounds, every employee will receive a windfall payment of £1,000 for each year they have been at the company as part of the share transfer.
The new employee trust will operate on principles which are designed to ensure the company follows Mr Richer’s vision far into the future, emphasising honesty, trust and mutual respect. This business strategy is consistent with the company’s refusal to use zero-hours contracts, its status as one of the small minority of companies with a pay gap that favours women and its commitment to donating 15% of all annual profits to charity.
Richer Sounds joins other notable names including John Lewis, Riverford Organic Farmers and Aardman as an employee-owned company and, for the meantime, Mr Richer will stay on to lead the company through the transition.
Deb Oxley, chief executive of the Employee Ownership Association, welcomed the move, saying: “We’re delighted to see Richer Sounds secure its future independence with a focus on its people and an eye on the future world – a world with a more inclusive economy and where more businesses are a force for good.”
Will more companies join Richer Sounds and make the move to become employee-owned? It certainly looks like a viable solution and, in a world where the inequality gap continues to widen, moves like this might well be an advisable way forward for businesses. A company is nothing without its staff, and the ones where the workforce has a real stake in the business could be the future.
