Reading an aged book Small Is Beautiful: A Study of Economics as if People Mattered by E. F. Schumacher, the last chapter New Pattens of Ownership seems interesting.

Scott Bader Commonwealth

Earnest Bader start Scott Bader Co Ltd in 1920, producing advanced materials. Through the two wars, since 1951, he started Scott Bader Commonwealth in which he vested the ownership of his firm, Scott Bader Co Ltd. The Commonwealth works by the constitution,

  1. the firm shall remain an undertaking of limited size, so that every person in it can embrace it in his mind and imagination. It shall not grow beyond 350 persons or thereabouts. If circumstances appear to demand growth beyond this limit, they shall be met by helping to set up new, fully independent units organised along the lines of Scott Bader Commonwealth.

  2. remuneration for work within the organisation shall not vary, as between the lowest paid and the highest paid, irrespective of age, sex, function or experience, beyond a range of 1:7, before tax.

  3. as the members of the Commonwealth are partners not employees, they cannot be dismissed by their co-partners, for any reason other than gross personal misconduct. They can, of course, leave voluntarily at any time, giving due notice.

  4. the Board of Directors of the firm, Scott Bader Co Ltd, shall be fully accountable to the Commonwealth. Under the rules laid down in the constitution, the Commonwealth has the right and duty to confirm or withdraw the appointment of directors and also to agree their level of remuneration.

  5. not more than 40% of the net profits of Scott Bader Co Ltd shall be appropriated by the Commonwealth – a minimum of 60% retained for taxation and for self-finance within Scott Bader Co Ltd – and the Commonwealth shall devote one half of the appropriated profits to the payment of bonuses to those working within the operating company and the other half to charitable purposes outside the Scott Bader organisation.

  6. none of the products of Scott Bader Co Ltd shall be sold to customers who are known to use them for war-related purposes.

More than one hundred years later, Scott Bader is still well in existence. It turned up in web search and on maps, headquartered near Northampton, England.

Managerial rights and pecuniary rights

For large-scale enterprise, the author suggests the public automatically hold one half of the shares, however by which they hold no voting rights. Managerial rights are solely to those who operate the company for flexibility of making decisions and taking initiatives.

The “managerial” right in the shares held by the public can only be activated momentarily when the public makes a claim to a court.

The “public” here is not the state authority, civil servants, but a local council comprising trade union, professionals, etc.

In exchange for the public holding half of the shares, the enterprise will pay less tax for the income.