By Professor Rory Ridley-Duff | Twitter

Tuesday 27 July • Viewing time: 4 minutes

Our researchers are behind a new business model that shares wealth and power more fairly — and creates a better society for us all.

Inequality is a huge problem around the world — and it’s getting worse. A 2020 study by the United Nations showed that the world’s richest 1% increased their share of income between 1990 and 2015, while the bottom 40% earned less than a quarter of income in every country surveyed.

I’ve been concerned about inequality for many years. In 2014, I came across a study at Harvard University which said that 90% of citizens are impoverished by private sector business practices. For example, US CEOs get 380 times the average worker’s pay. 

Around the same time, I saw a documentary about worker cooperatives in Spain and the US called Shift Change. It reported that the ratio between top and lowest paid workers in the Mondragon Co-ops, where there are 100,000 workers, averages just 5:1. And in societies where this kind of worker-owned businesses are widespread, wealth is spread more fairly.

Inspired by this, I developed the FairShares Model, a new way of running a business based on sharing wealth and power among the entire workforce, rather than concentrating it at the top. Over the last seven years, I’ve led a team at Sheffield Hallam that has influenced the spread of the FairShares Model across 37 countries around the world. 

But first, let’s explain the basics.

What is a social enterprise?

FairShares is a way to organise a social enterprise as a cooperative, so that every active participant has a stake in the company. 

The most familiar example in the UK is John Lewis, but there are lots of smaller cooperatives — including credit unions and building societies. The cooperative business model is widely used around the world — for example, in Bangladesh the biggest provider of rural banking and telecoms is a cooperative.

For me, what stands out in a social enterprise is that the business puts just as much weight on social concerns as it does on making money. 

What is the FairShares Model?

Under the FairShares Model every active contributor to the business is a member, whether they’re a worker, a customer or an investor. It means everybody is properly committed to the future of the enterprise.

It’s also a way of redistributing wealth and power. Profits are shared more equally. And instead of a hierarchy of line managers, everyone works together in a series of management circles. This gives everyone a voice in the company, and more control over their own work.

Spreading the word

Along with three other experts around the world, I registered the FairShares Association in 2015. Through the association, we're helping people set up their own multi-stakeholder enterprises around the world, following the principles and ways of working set out in the FairShares Model.

We created tools to track who is using the resources we created. The results show that over 200 entrepreneurs have used our materials to plan their own FairShares enterprises. We know that's happened all over the world — in Canada, Ireland, the UK, Belgium and the USA.

Some of these are new businesses, but many others are using the FairShares Model to transform their existing enterprise into one with more shared wealth and power, a greater social purpose, and a more democratic working culture.

A foundation for the future

Our impact goes beyond supporting individual enterprises to set up under the FairShares Model. At Sheffield Hallam we run courses training people to educate others in the model.

As a result we have seen a whole infrastructure for the model growing around us — as other incubators for FairShares enterprises are formed organically, without our direct involvement.

One example of the growth of the model is the Quaker movement. I have been acting as a consultant for the board of a Quaker organisation in Yorkshire, and it's clear to me that they want to take the FairShares Model into other organisations — using it as a guiding philosophy to redevelop and transform their thinking.

Building a fairer world

The result of all this can only be the creation of more and more FairShares enterprises. We have a good chance of seeing exponential growth in the number of these enterprises worldwide. And every time a new FairShares enterprise is formed, the world gets a little fairer.

Over time, the FairShares Model will help alleviate poverty and address UN sustainable development goals around inequalities. And because many of the enterprises have an ecological purpose, it can also help tackle climate change.

Ultimately, my aim is for the model I created to help reverse the sort of statistics I quoted at the start of this article — and build a better, fairer society than the one we have lived in for the last few decades.