Maja Pawinska Sims 25 Apr 2018 // 6:42AM GMT
LONDON — PR and digital consultancy Cirkle has radically changed its ownership structure to become a majority employee-owned business.
The agency, which celebrates its 20th anniversary this year, has placed 60% of its shares into an employee ownership trust, or EOT, from which every member of its 40-strong team will benefit. Founder and chairman Caroline Kinsey, who previously owned 100% of the business, retains 40% of the shareholding.
Employee ownership trusts, whose most famous advocate is perhaps the John Lewis Partnership, are still a rarity: there are only 300 in the UK and Cirkle is believed to be the first majority employee-owned firm in the UK PR industry, although there are more examples in the US.
All Cirkle employees, current and future, will automatically become beneficiaries of the trust, offering them short- and long-term financial benefits and greater involvement with the development of the business. Cirkle staff – client facing and support staff – will now be known as partners and, as indirect owners of the business, will benefit from partnership bonuses.
The EOT model also means that if Cirkle was ever sold, all employees would receive part of the value of the business, with the distribution based on principles set out in EOT legislation: salary, hours worked and length of service.
The current management board will become known as the executive board, and will continue to drive strategic decisions, while the senior directors will make up a new partnership board, which will focus on operations. The trust will be managed by an independent body of trustees, who have a legal duty to make sure every decision made is in the best interests of the employees.
Kinsey said the EOT model had been shown to yield tangible commercial and performance improvement in other businesses, improving staff motivation and retention, productivity, the quality of work, and client relationships.
She told the Holmes Report: “The great thing about an EOT is that I am transferring a majority shareholding but preserving the integrity and continuity of the business and rewarding the contribution and loyalty of staff. As an agency recognised for our employee engagement, our culture and a real belief in and focus on our people and our team, this was the right structure. It’s the start of the next chapter for Cirkle.”
New Cirkle MD Ruth Kieran, who joined from Text100 in February said the feedback from clients and staff had been positive: “Clients have told us they are impressed that we’re being so progressive — I think our approach will reassure clients that our team are highly motivated and stable. And our team say they are proud and honoured to be Cirkle partners.”
Cirkle’s clients include Morrisons, Premier Foods, PepsiCo, Ferrero, Bosch Smart Home, Energizer, GSK and Pernod Ricard UK.