Interface NRM: A tale of how employee ownership can power ethical and profitable business.
Mike had been working as a Voluntary Services Overseas volunteer at a South African college, teaching a course on community forestry, while Gavin had been assisting the national government of Bhutan in managing their forests.
Back in the UK, they joined forces to set up Interface NRM. Based in the West Midlands area, the company is an ethically powered operation, focused on increasing wood sustainability in the UK, and on upgrading the environmental, social responsibility and safety performance of companies in the service, design, forestry, manufacturing and construction sectors.
Interface NRM had humble beginnings. The company was founded in a small science park in the Wolverhampton area, but has grown steadily, expanding by more than 30% in each of the last three years. Currently, it employs 15 members of staff and draws on the services of more than 30 associate auditors. Over the last 18 years, Interface NRM has certified over 1,000,000 cubit metres of UK wood as being derived from sustainable and legal sources, and has awarded ISO 14001 certificates for the incorporation of environmental goals to hundreds of companies.
The company’s growth soon attracted the attention of potential buyers, but after investigating one potential acquisition, Gavin and Mike started to question whether this approach fitted with their ethics or those of the company.
So instead, they turned to Employee Ownership and chose to transfer most of the company’s shares into an Employee Ownership Trust (EOT). They decided that this approach offered an exciting method of delivering their sustainability goals while operating ethically. Through the EOT, their staff would gain security and benefit directly from the company’s profit.
Gavin and Mike also knew that this approach would entail risk. A traditional sale through an acquisition would have given them a significant financial benefit, but by opting for the EOT, they committed to being paid for their shares over five years, with no guarantee that the company will continue to be profitable and to be able to make the repayments.
Yet they remain committed to this ethical approach, believing that the risks are outweighed by the overwhelming benefits of ensuring a motivated and engaged workforce, who stand to benefit personally from company success. As Gavin says:
“We were fully aware that selling our shares through an EOT was more of a personal risk than some sales options. But our main concerns are for the future security of our staff and the ethics of our business. We have full and entire trust in Interface and its staff, and are confident that the EOT will be a success for all.”
The approach taken by Interface NRM has been praised by the Chief Executive of the EOA, Deb Oxley OBE, who believes that employee ownership can be the foundation of a resurgent UK economy over the coming years:
“Businesses that give employees a stake and a say build trust and shared responsibility, therefore uniting leaders and employees behind a common purpose. This leaves the business in a better position to flex and adapt – key qualities needed to help the UK Build Back Better.”
Remarkably, Interface NRM plotted this transition into employee ownership while navigating the difficulties of COVID-19 lockdown and furlough. After what has been a gruelling year for everyone in the UK, Gavin and Mike will have the pleasure of announcing, on January 6th next year, that the transition to EOT is complete and that the company is fully employee-owned.