Presentation to IDC Conference 24 – 25 June 2012

1. Presentation to IDC Conference 24 – 25 June 2012 Using Employee Ownership to drive innovation and creativity and performance, can they be linked?

2. What the Research Says… *Source A research report for Employees Direct from Birkbeck and The Work Foundation, By Jonathan Michie, Christine Oughton and Yvonne Bennion November 2002 Over 100 companies 78% individually owned

3. What the Research Says… *Source A research report for Employees Direct from Birkbeck and The Work Foundation, By Jonathan Michie, Christine Oughton and Yvonne Bennion November 2002 Over 100 companies 78% individually owned

4. What the Research Says… *Source A research report for Employees Direct from Birkbeck and The Work Foundation, By Jonathan Michie, Christine Oughton and Yvonne Bennion November 2002 Over 100 companies 78% individually owned

5. What the Research Says… • The ESOP Performance Puzzle in Public Companies: • 196 publicly traded U.S. ESOP companies • Each ESOP company was matched to a comparable non-ESOP company • Studied during the years 1998 through 2004 • The results: • Returns on assets that were higher than the matched non-ESOP companies in all seven years • Net profit margins that were higher in all of the five years • Operating cash flows in three of the five years

6. What the Research Says… In "The ESOP Performance Puzzle in Public Companies," published in 2006 issue of the Journal of Employee Ownership Law and Finance, Robert Stretcher, Steve Henry, and Joseph Kavanaugh

7. What the Research Says… Joseph Blasi and Rutgers University

8. What the Research Says… Joseph Blasi and Rutgers University

10. 1929 John Lewis Partnership “owned by the staff, for the staff”

11. 2011 JOHN LEWIS PARTNERSHIP • Sales of £8.7bn • 81,000 employees (Partners) • Profits of £354m • Partnership Bonus of £165m • 14% of pay • Over the last fifty years the average bonus has been 16% • In industries in general in the UK in the last 3 years bonuses have averaged 0-3% • 100% employee owned

12. Recognise others Be honest Give respect Show enterprise Work together Achieve more

13. Verdict business researchWhich? consumer magazine“Britain’s favourite retailers No 1 and No 2”

14. The ARUP Story • Consistent organic growth over several decades • Strong financial independence • The advantage of being able to take a long-term view that allows: • Innovation pursuit • Creativity • Technical excellence • That’s backed up by the latest staff survey: • 89% of Arup personnel around the world “feel proud to work for Arup” • 87% “would recommend Arup as a place to work”.

15. The Publix Story • Fortune 100 top best companies to work for 2012, for the 15th consecutive year • Largest employee-owned supermarket chain in the United States • 2011 retail sales of $27.0 billion • Current employee count of more than 152,500 • Fastest-growing employee-owned supermarket chain in the United States • Excels in community involvement and volunteering

16. The Publix Story Why I Love PublixEssie,Deli Manager Teamwork is so important to be successful, and we really have that here at Publix. I am proud of my co-workers and managers because we always pull together to get the job done. I love interacting with our customers. You just never know how a simple smile and a, "Hi, how are you today" can brighten someone's day. I feel that every customer I deal with leaves a little brighter than when they came in. I love the fact that I work for a company that allows me to talk to anyone in management if I have a problem. Publix has boundless opportunities for anyone who puts forth the effort. You can go as far as you want with our Company. My name is Essie and I LOVE PUBLIX.

17. The Publix Story Why I Love PublixDon,Pharmacy Supervisor Before I ever worked for Publix I knew the company had a great reputation, even though I might not have known exactly why. The more I learned about the company, the more I wanted to be a part of it. When I graduated pharmacy school in 2001, I set my sights directly on Publix and accepted a position as a floating pharmacist. You will notice very quickly that we are not "employees." Being a private company, we are associates and owners whether in the stores, manufacturing, or support staff. There is a definite sense of ownership present at all levels of the company. This results in an environment where associates are empowered and encouraged to make a difference. Despite a very competitive marketplace, Publix continues to expand and succeed, never losing focus of our mission. Continued expansion and innovation provides limitless opportunities for professional growth and advancement. I always enjoy looking back on my career with Publix, but that is not nearly as exciting as looking forward at my future with Publix.

18. Conclusions • Just as important as ownership is: • Employee involvement • Low supervision, but a high performance culture • Employee participation in decision making • Information flow to employees • Involvement in shaping the culture • Innovation is harder to measure but of note most silicon valley companies operate employee ownership with low supervision and high involvement…..

19. Discussion