Quakers and Business Group
Promoting Quaker values in Business and the Workplace

Scott Bader - Employee Ownership via democratic trusteeship

Scott Bader:  Our Purpose, Governance, Future, History and Present

Purpose

The Scott Bader Commonwealth’s deepest purpose was forged through tremendous searching and threshing, involving many participants as well as Ernest Bader and his family.   The resulting Commonwealth was created to make an attempt “to live in that power and life that takes away the occasion for war”.  From 1951, this is still our foundation.  It means we run our business to:  help create a better industrial society;  keep up with innovations in resin and polymer technologies and their uses;  and run our company profitably.  If and when successful, our business is for:  the good of us and our successors, ie the trustee-shareholders-in-common;  the good of all stakeholders – including the environment; and not least, to leave the world a better place.

Creating the Scott Bader Commonwealth in the 1940s-50s’ context led our founders to seek to remove the seeds of conflict within business, by combining labour and capital.   We have no outside shareholders.  If we need to raise fresh investment money, we borrow it at commercial rates, invest it in our new opportunities - and repay it from their proceeds.  To the extent that we have to pay interest (ie, rent) on any more permanent loan capital in our balance sheet, then we have less to spend on our other aims:  charitable giving large and small, workforce incentives and of course re-investment.

Our founders were convinced we should support and try to strengthen situations where war does not arise.  So, Scott Bader will not sell its products for harmful, war related purposes:  we say so in our constitution, which leaves us arguing at times just what is a weapon of war, when the item in question might be something else too.  We have our share of human ambiguity and striving for clarity.

All employees are trained for, and expected to apply for Membership of the Commonwealth, which comes with ethical strings attached.   Members commit to conducting themselves in accordance with a set of principles:  working unselfishly for the mutual wellbeing of all, using the company’s resources to build a better society, promoting Scott Bader’s founding principles and common trusteeship.   Members are trustees-in-common, together holding in trust the company’s bundle of assets, commitments, relationships and opportunities.   This system works best when we have an active form of trusteeship, not a passive one.

Raising our awareness of what business is for, (is it just for making money, or is it for creating a peaceful world?) and what can be done to improve one’s life and business times are concerns deeply underlying all our activities.  So, yes the founders’ vision was to help everyone seek a better way for themselves, but also to seek collectively an improved way of doing business, of running the world’s industries.  Scott Bader is too small to do so alone, but aspires to be a lasting example, an eternal challenger:  by showing another way is possible which has some desirable features and consequences.

In today’s times particularly, we are sensitive to the needs to safeguard our environment by minimising our impact, and to seek to focus our research on more imaginative, sustainable & necessary products, using less inherently hazardous chemistry.

Today we also seek to run a successful international, cross cultural industrial democracy.  We have much to learn here, given the range of economic circumstances and cultural expectations and norms we live within and span.   Much communication, trust, humour and a strong faith in our founding purposes are our ways forward in this contemporary phase of our adventure.

We also intend to survive the present credit shortage and coming business downturn, and be ready for the better times which will follow!

Governance

The Commonwealth is a UK registered charity.   Its governance is controlled by our constitution[1], which makes plain the roles, responsibilities and sizes of the governance bodies.  This ensures Trustees, the Commonwealth Board, the Members Assembly, the local Councils and the Group Business Board work together for the success of the whole.    It also keeps power suitably focused and balanced, but not dangerously concentrated.   Our Trustees are in the Gandhian[2] tradition:  we do not own, we hold in trust.

As has been said, employees applying to become members of the Commonwealth commit themselves to working to a set of principles and values – and they serve a probationary period.  Presently, about 500+ of the approx 650 employees are members.   Members elect the Commonwealth Board, which as the shareholder has formal ownership of the Company, its business arm.   The Commonwealth Board is responsible for the charitable purposes of the Commonwealth, and monitors our living them out in practice.  Working within the constitution and its Guiding Principles, The Commonwealth Board maintains a code of practice and a set of working principles to help guide us all[3]. From time to time, the Group Business Board creates a Purpose statement to guide  and explain our business conduct in the commercial world.[4]  Finally, the Commonwealth has Trustees, some internal, and some external, who are responsible for the founders’ shares.  Together with our Life President, Godric Bader, they are the Commonwealth’s guardians and Remembrancers, as Charles Handy termed them.  The founders’ shares give the Trustees reserve powers, to use only if the charity or the company are in danger of departing from our founding purposes.

Members also elect our recently formed, international Members Assembly, which safeguards members’ interests between Annual General Meetings.  This democratic body approves the appointments and pay of Group Board directors, holds the Group Business Board to account and ensures that local democracy prevails across the company.  Remember:  our shared purpose is to make and use our profits wisely!   The Group Business Board contains internally elected non-executive directors, externally appointed non-executive directors and the executive leaders of the business.

Future

How do we intend to go forward?  We are presently reviewing our constitution to ensure it is fit for the 21st Century’s first 50 years at least.   Core matters will remain unchanged, true to the founder’s intent:  We Commonwealth members are trustees-in-common, not owning shares in our company as individuals:  we own them collectively, in common.  This will continue to be the case.   We ‘own’ our assets in the sense of holding them in trust, nurturing them for future generations, not so we can exploit them to exhaustion for our own benefit.  So, ours is not just an employee owned company, with the goal of maximising the wealth of the employees.  It will remain a common trusteeship, with the aim of living out our economic lives to a declared set of ethical goals and standards and with the declared purpose of improving the system we inhabit.  It can feel like doing things the hard way, for sure, but it also works well when difficult times of crisis, such as the world’s present ones, come about.  We know and say openly we are not in business for the money only, we are not driven by personal needs and sheer greed alone.  We are in it to make the world a better place, by seeking the peaceful way where we can, the environmental way compatible with a cycle and sustainable rhythm, rather than an exploitation and exhaustion route – again, where we can.  We share our riches with the less advantaged and seek to improve our own understanding of the possibilities of life.  Those of us who acknowledge the spiritual know our adherence to Commonwealth membership is, in classical language, a covenant, an agreement with the eternal and all embracing purpose for our existence.   For others, it is a search for a better, still profitable way.

The Commonwealth is confident about its continued existence, which depends entirely upon its powers of innovation and on it sustaining its own commercial success.  We continue to debate, review and refresh the purposes the Commonwealth exists to serve, whilst remaining true to our founder’s vision.  We know our human frailty via our daily work and our ambitions – but we persist, ambitiously!

History

We were founded on 23 April 1951, when the new charity, The Scott Bader Commonwealth, was created by Ernest Bader and the family shareholders.  They passed the responsibility for, and the shares of their company to the new Commonwealth, an act of great imagination, generosity and courage.   Ernest, Swiss by birth, arrived in London in 1912 and in 1920 set up his own trading company to import Swiss celluloid.  He incorporated Scott Bader Ltd in 1923, named for himself and his English wife, Dora Scott.    In the inter war period he built a pigment paste plant at  the company’s warehouses in  east London and grew his business successfully.   In the Second World War, except for a skeleton staff in its Kingsway offices, the company was evacuated to Wollaston, Northamptonshire.  Its UK operation and headquarters are still located there – nowhere near the UK’s main industrial and chemical centres!  London Office moved out in 1963: Godric worked there for a while, learning sales and visiting customers with the London Area rep.

Since the war, the company has grown overseas and in size.  Today we manufacture in the UK, France, Croatia, Dubai and South Africa, and sell directly or via agents in many countries around the world, including a small, new operation in China.   We make resins, adhesives and gellcoats, which we sell to others to make into boats, baths, basins, wind turbine blades, etc.   We also make polymers, which we sell to others as ingredients for skin care products, printing inks, sealants, etc.   Presently, we employ about 650 people, half of them in the UK, and turn over about £150m per annum.

Present

Over recent years, we’ve made a modest profit, which we re-invest, pay to the employees as incentives and give to charities via the Commonwealth’s charitable donations policy.   This practice is and will continue to be mandated by our constitution.   The charities we favour are those for the socially and physically less advantaged, in our local working communities and areas and also in the less developed parts of the world.   We match any employee incentive payment total with our charitable giving, and re-invest more than half our surplus.  This way, we hope for robust financial health, the chance of more good, satisfying work in the future and to progress towards our founder’s vision of a more peaceful world run by compassionate, capable people.  In hard times, we keep a base level of giving going.

However, like all other manufacturers, we face very difficult business conditions in 2009’s severe credit shortages and associated business downturn.   Our business survival will depend upon our business skills as well as on our ethics.   We seek strength and success in both.   Successful business comes not just from good ethics, sound finance, great HR, Marketing, Sales, Manufacturing and innovative R&D.  It requires the agile, skilful blending of all these and more to play the game successfully in the prevailing market conditions.  Wish us persistence – and some luck!

[1] Copies of the Constitution, the Members Handbook and the Charitable Giving guidelines can be had from the Commonwealth Office, Wollaston Hall, Wollaston, Nr Wellingborough, Northants.

[2] See the Ghandi website

[3] The principles are:  Care; Equality (of opportunity); Ethics; Involvement; No discrimination; Respect (human dignity); Service.

The Full Code of Practice for members was last updated by the Commonwealth Board in February 2007 and is available from the Commonwealth Office.

[4] The current Purpose statement was published across the company in 2006 and is available from the MD’s Office.