First Slovenian Congress of Economic Democracy: For a stake in the future

6.10. 2022 The Institute for Economic Democracy organised the first Slovenian Congress of Economic Democracy at the City Museum in Ljubljana - For a share in the future

At the event, we discussed best Slovenian and foreign practices in employee co-ownership, brought together important stakeholders in this field and announced Vision 10-30, which sets the goal that by the end of 2030, 10% private sector workers will become co-owners of the companies in which they are employed.

Keynote speakers

Robert Golob, Prime Minister of the Republic of Slovenia
Luka Mesec, Minister for Labour, Family, Social Affairs and Equal Opportunities
David P. Ellerman, President of the ED Institute
Stephen Smith, Managing Director of Amsted Industries

Guests on the panel

Panel Employee ownership in Slovenia (Jure Knez, Matjaž Čemažar, Peter Kosin, moderated by Tej Gonza)
Panel A step towards a European network for economic democracy (Nicolas Aubert (FR), Fred Freundlich (ES), Pascale Nieuwland-Jansen (NL) and Ermanno Celeste Tortia (IT), moderated by Prof. Aleksandra Kanjuo Mrčela)

Event summary

This Gonza, Director of the ED Institute, announced that the Institute had successfully transferred the American ESOP model to Slovenia and had established it in the first pilot projects. They have conducted a number of trainings on financial literacy, participative governance and ownership culture, prepared a policy proposal on which the draft law is based, and have received a lot of interest from the international community. IED has put Slovenia on the global map of economic democracy. The first Slovenian Congress on Economic Democracy showcased good practice, brought stakeholders together and announced Vision 10-30, which sets the goal that by the end of 2030, 10% of all private sector workers will become co-owners of the companies in which they work.

Robert Golob, the Prime Minister of the Republic of Slovenia announced the Government's support for the concept of employee co-ownership in both companies and institutions. Mr Golob is aware that the Congress is only the first step to finding a place for economic democracy in Slovenia - and that we will all be better off for it. Employee co-ownership will help Slovenia to create more added value, increase employee loyalty and increase its competitive advantage in the world.

David Ellerman, former advisor to Joseph Stiglitz at the World Bank and Chairman of the IED, presented the most successful modern practice of employee co-ownership - the ESOP in the US and the EOT in the UK. Both models build co-ownership through a separate legal entity holding shares in the company on behalf of the employees. ESOP companies in the US today employ 10% of the private sector workforce, while in the UK, almost 1000 companies have transitioned to employee ownership through an EOT trust since the law was passed in 2014. Ellerman said that at IED, they have developed a model that builds on and builds on the best practice of employee co-ownership. The model is presented in a technical paper, European ESOP, published in 2020 and updated in 2022. The pilot implementation of the ESOP in Slovenia is based on this model.

Luka Mesec, The Minister of Labour, Family, Social Affairs and Equal Opportunities spoke about the role that economic democracy can play in ensuring a socially responsible model for the Slovenian economy. He mentioned that economic democracy also has positive social externalities - especially in empowering and building the autonomy of individuals, which can also have positive consequences for the revival of political participation. He assured that the pursuit of economic democracy policies is one of the priorities of his mandate.

Stephen Smith, CEO of Amsted Industries, presented the company with 17,000 employees, which is 100% employee-owned through an ESOP fund. Amsted Industries is a leading manufacturer of industrial components for railways, transport vehicles and construction. Smith has repeatedly emphasized that employee ownership is a competitive advantage and business model and one of the important reasons for the company's success. The US is very active in supporting employee ownership through various measures, which is why companies like Amsted exist. Experience shows that employee-owned companies are on average more productive, more resilient in times of crisis and provide better working conditions for employees. The American ESOP is proof that employee ownership is a policy of added value and social responsibility, which is why it deserves state support in Slovenia.

The first panel brought together three CEOs of Slovenian companies who share a socially responsible vision of employee co-ownership. Peter Kosin (Inea d.o.o.) opened the discussion with the challenges faced in the transition to the 100% sloESOP model to address the problem of ownership succession. He pointed out that the State could provide more support in providing financial mechanisms for companies to buy back shares from departing owners. He concluded by saying that co-ownership must be accompanied by appropriate knowledge and a culture of ownership - only then will the potential of employee-owned companies come to the fore.

Jure Knez compared sloESOP with the direct involvement of employees as shareholders in the company. He said that the two models were compatible and not mutually exclusive. Direct shareholding provides more flexibility, giving the company or the business owner the opportunity to further reward outstanding individuals in the company. sloESOP is a more stable model that anchors ownership among employees in the long term - it ensures inclusiveness, predictability and stability of employee co-ownership and builds a culture of ownership among all employees in the company. He praised Mondragon as an example of best practice and described the vision for the Katapult business accelerator, where he aims to build a network of supportive employee-owned businesses.

Matjaž Čemažar stressed the local responsibility of employee-owned companies. He argues that it is no coincidence that Železniki is the municipality with the best standard of living in Slovenia - the main employers there are Domel and Alples, both of which are partly owned by employees. He outlined the succession challenge facing Domel - how to retain internal ownership? He mentioned that the additional taxation on the buy-back of treasury shares is a challenge they are facing due to the announced changes in the income tax legislation. He acknowledged that Domel also needs a more long-term solution than their current model, which the sloESOP model can provide.

The international panel with Prof. Aleksandra Kanjua Mrčelo (University of Ljubljana) included Prof. Ermanno Celeste Tortia (University of Trento), Prof. Fred Freundlich (Mondragon University), Prof. Nicolas Aubert (University of Aix-Marseille) and Pascale Nieuwland-Jansen (Director of the Institute for Financial Participation, NL). The panel addressed the potential of European integration in research, policy support and the network of European employee-owned companies. Each country has its own experience in promoting employee co-ownership. They identified the absence of a single European model that would ensure more uniformity in the promotion of employee ownership by the EU institutions. Slovenia could provide an important precedent for a common policy to pursue employee ownership in the SME sector with the sloESOP model.