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Ohio’s Employee-Owned Network: Helping Employee-Owned Companies to Help Themselves? 

by: Yates, Jacquelyn
Source: The Ohio Employee Ownership Center, Kent State University 

Can a support organization enhance the development and performance of an employee-owned sector in a market economy? That is the question this paper will address. While there is testimonial evidence that support organizations matter, empirical evidence is sparse. Small Spanish cooperatives, the Sociedades Laborales, have attested that their provincial support organizations are important to their success. An early research effort in the U.S. suggested that employee owned companies were more numerous and more long-lived in states with support agencies (Winther 1997). This finding notwithstanding, of eight state support organizations, only one remains as a freestanding institution solely focused on promoting, supporting and researching employee ownership. That is the Ohio Employee Ownership enter, which houses Ohio's Employee-Owned Network, whose impact is the focus of this paper.

The Ohio Employee Ownership Center (OEOC) was founded in 1987 as part of Ohio's commitment to economic development. Based at Kent State University over the past 17 years, it has grown into a multifaceted support organization with a staff of nine, administering and managing a variety of programs to assist in the creation of new employee-owned companies and participatory management in established ones. In the U.S., employee ownership is typically structured as an Employee Stock Ownership Plan or ESOP, a pension plan where the assets are invested in employer stock. Employee involvement in the management of the company is not legally required, and employees of most ESOP companies have little or no involvement. Most OEOC clients are ESOPs, but the Center has also assisted a few companies exploring workers' cooperatives or direct stock ownership.

Over the years, the OEOC has assisted 463 employee and company groups, employing more than 84,000, exploring in each case whether employee ownership makes sense for that company; it has helped employees buy part or all of 69 of these companies, retaining or stabilizing 13,654 jobs. The result has been that employees have created more than $300 million in employee equity. These companies continue to create in excess of $20 million in new employee equity annually, in addition to cashing out retiring employees.