Summary of Broadening Capital Ownership in the Global Economy: Creating an International Network to Develop Policy Options

Ford Foundation COG/ OEOC Project

4/1/99 - 6/30/00

Table of Contents

9. Project Summary

II. Problem Statement

III. Working Group Organization, Focus and Requirements

IV. Initial Discussion Topics for Network Working Groups

V. Focusing the Discussion Towards Action

VI. Timeline of Project

VII. Project's Deliverable Products

VIII. COG Mission, Goals & Objectives

IX. COG Leaders, Members and Staff

X. Beyond this Pilot Project

1. Project Summary

This is a fifteen-month pilot project (the "Project") to create an efficient international electronic network (the "Network") to develop viable policies and implementation strategies to broaden capital ownership through employee ownership in the increasingly global economy. The Ford Foundation granted $100,000 to the Ohio Employee Ownership Center (OEOC) at Kent State University (KSU) to administer this Capital Ownership Group (COG) project.

This Project focuses on three things: (1) creating the electronic infrastructure and recruiting members for the international Network dedicated to broadening ownership, especially through employee ownership; (2) conducting focused, facilitated discussions around at least five key issues; and (3) initiating the process of developing policies around broadening the ownership of productive assets.

The physical electronic infrastructure is housed at the OEOC at KSU. It will include a dedicated server, a web site containing a virtual conference center with working group meeting rooms, both real time and facilitated threaded discussion, and a library. Project coordinator is Deborah Olson. Dan Bell and Steve Clem from the OEOC will help to staff the project. John Logue will handle administration.

2. Problem Statement

Economic globalization is transforming our world. The differences in

living standards and availability of political freedom in distant countries affect the daily lives of average citizens in ways that, in previous generations, could only be affected by inhabitants of one's own region or nation-state.

While globalization has positive consequences, it has some distinctly undesirable ones as well. For example, global corporations are gaining hegemony over elected governments. The result, too frequently, is the corporate "race to the lowest social wage" or the "race to the bottom." Herein, these terms mean the current situation where global corporations compete with one another to lower costs by moving production to the countries with the lowest wages, safety, labor rights and environmental standards.

This Project focuses on development of one of several proposed solutions to that problem: namely broad individual ownership of productive capital by the general population, derived from future retained earnings, NOT expropriation of existing wealth.

This Project is aimed at addressing the following key problems:

(1) Globalization seems to be increasing the polarization of income and

wealth, and increasing the concentration of wealth. (2) Technology allows fewer workers to produce ever-increasing quantities of goods. (3) Much competitive advantage seems to lie in lack of social, labor, and environmental legislation. (4) A rising tide of productivity does not lift all ships, when low paid workers cannot afford to purchase the ever-increasing quantity of goods they produce. (5) Corporations are no longer anchored to the countries that once determined the rules for relations to social needs. (6) The global market system removes the connection, previously provided by national governments, between democracy and capitalism.

Consequences of these problems include:

(1) Many low paid workers cannot become consumers of what they produce. (2) Higher wage workers, who can afford to be consumers, lose jobs, with a net result of fewer consumers available to purchase the output of ever

more efficient corporate producers. (3) Excess productive capacity continues to be built in ever-cheaper labor market countries, wasting both economic and environmental resources. (4) Globalization of companies decreases the power of labor and governments (compared to multi-national corporations) to counteract these social negatives. (5) Developed countries face growing fiscal crises, and decrease social spending as disappointing economic growth does not keep pace with increased costs of social programs. (6) Global market competition requires that all the competitors move production continuously to seek the lowest costs in order to survive, causing a race to the bottom social wage; even if the savings in costs to business wreak tremendous long-term social costs on the environment,

society, justice and democracy.

We shall focus our work on the one portion of the problem solution

wherein lie our expertise and strength -- broad capital ownership.

Based on our experience, broadening capital ownership: (1) empowers

individuals and families; (2) anchors capital and jobs in communities;

(3) fosters enlightened workplace practices and enhanced education for

workers; (4) develops a long term view on capital investment; and (5)

creates an incentive for environmental responsibility.

Employee ownership has been used in some form by many countries seeking to grapple with this problem. In most of the formerly communist countries a variety of stock voucher systems have been tried. In some countries, such as Russia, the outcome has not provided much benefit to the average working person. In Poland and Hungary there has been more success, and many failures. The Egyptians have used a system with major union involvement in management, which is currently being revised due to concerns regarding access to capital. In Ireland and the UK, employee ownership has been used to privatize major public utilities, such as bus and telephone systems. It is still unknown how beneficial these privatizations will be for average workers or citizens. In Italy and France, major companies are required to have profit sharing plans, but these do not provide significant governance roles for workers. In Germany and other EU countries, works councils provide workers a voice, but always a minority voice, in corporate governance.

Unlike privatization of government owned companies, the US model for broadened ownership gives private market parties personal, corporate and lender tax incentives to encourage employee ownership. This model has generally worked to provide employees with both capital assets and a voice in corporate governance, which they would otherwise not have had, and an opportunity to become majority owners of the company. This model has less sweeping coverage than those in France, Italy or Germany, but can provide a more thorough ownership stake. There are approximately 10 million employee owners in 10,000 companies in the US. It is an attractive method of broadening ownership because it enables inclusion of workers, who own no capital assets, in ownership of new retained earnings, rather than redistribution of existing capital resources. It provides for a shift in the overall distribution of capital over time, as the broad worker population learns new ownership skills. By shifting the distribution of capital ownership discussion, from redistribution of existing capital, to distributing the growth in the capital pie, Louis Kelso and Senator Long provided us a fair, peaceful and politically viable means to change the distribution of the ownership of productive assets.

Broadened ownership of productive assets has three overarching advantages in the global economy. (1) It provides a market-based opportunity to increase the income of working people and others participating in ownership in the community. It creates a new stream of income, reducing the economic inequality that economic globalization otherwise tends to generate. It does not depend on regulatory regimes, like many other ameliorative proposals. (2) It impacts corporate decisions by tending to anchor capital in a fashion that prevents churning of jobs and "race to the bottom" competition among political units. That reduces economic insecurity for ordinary working people and makes knee-jerk political reactions less likely. And (3) given existing corporate governance structures, it builds into the corporate decision-making process representation for broader employee and community interests.

However, none of the employee ownership systems currently in existence provides a complete solution to the key problems of the global race to the bottom. The US system is costly to the taxpayers, and depends on the willingness or private sellers. Most of the privatization systems have used employee ownership as a quick pass-through from state ownership to private corporate ownership, without creating lasting, capital anchoring, solutions. The continental profit sharing systems are virtually voiceless, and co-determination is statutorily a minority voice.

This Project’s aims to clarify, focus and provide an organized forward direction to the previous myriad, limited efforts at broadened ownership. Over the last 20 years, the worldwide employee ownership community has developed a wealth of experience from experimentation with a wide variety of capital-broadening mechanisms. Until now, we have not yet joined together to examine best and worst practices from each of these systems, nor to generate co-ordinated policy proposals. We seek to create network of employee owned companies, knowledgeable professionals, trade unionists, community organizations and government officials interested in dispersion of capital ownership. The Network shares information on best and worst practices, and is developing co-ordinated policy proposals to peacefully disperse and anchor capital more equitably in a global economy, and means to disseminate these proposals.

Advantages of the developing such policies include: (1) increasing economic security as technology decreases jobs; (2) providing a natural cushion for redundant workers; (3) decreasing the need for welfare programs; (4) local owners are more concerned with social/environmental consequences of local production; and (5) societies where most people have a property stake are less politically volatile.

We are working to develop policies that will be viable in developed and developing countries by involving people from all regions in creating them. We hope to create policies that can be implemented in many countries, in order to raise the floor of global social wage competition. An example of one policy idea we intend to explore would require companies to provide stock (to employees or trusts (such as the Canadian or Swedish Labor Venture Funds) as a quid pro quo for any government largesse to the corporations. Such stock can provide suffrage rights in the global corporations, and/or serve as alimony for deserted communities to use for new investment capital.

The Project aims to develop COG as a global forum to discuss and develop policy on shared capitalism, providing research, technical assistance, developing and disseminating policy alternatives, creating a globally coordinated strategic action plan for policy implementation, demonstration projects and the means for their replication.

III. Working Group Organization, Focus and Requirements

The initial working group discussions will review ideas proposed by discussion leaders and participants. Obviously, Network members will have many ideas they will wish to incorporate and flesh out. The discussion will be structured to help Network members set priorities and focus their policy development efforts in directions deemed realistic and effective by the group. We will use strategic planning formats to produce action-oriented results, and to focus and refine the Network’s work going forward.

We intend the Network to be an ongoing group that develops its own agenda(s) and working groups after producing the policy dialogues required in this Project.

Each working group will meet electronically monthly for a discussion facilitated by a COG/OEOC staff member who will also serve as recording secretary. Participation in the Network will be free during the Project period, but there will be a monthly log-on and work requirement for Network members.

IV. Initial Discussion Topics for Network Working Groups

A. The "Industrial Homestead Project." The Industrial Homestead Project’s purpose is to create policy alternatives that provide financial benefits and a voice to the general population in exchange for the protection and benefits governments provide to businesses. One such form would provide stock ownership to employees and/or the general population as a quid pro quo for government largesse to private corporations. American examples of this philosophy to date include the 1974 Chrysler bailout and the establishment of Conrail, which both mandated that a portion of the company is employee owned.

1. Provide tax benefits to companies on a sliding scale depending on the quality and quantity of employee ownership and control;
2. Create an ownership impact audit process for bidding on government contracts, giving credit against pricing to companies that implement meaningful long term local ownership disbursement of their stock;
3. Open the US Federal Reserve discount window to promote employee ownership by providing very low interest loan funds (0.5%) for investment in companies using ESOPs, CSOP, and Community Investment Corporations. This proposal would require every bank which uses the Federal Reserve (or initially those in an experimental study) to make a specified percentage of its business loans to companies qualifying for these funds;
4. Discuss possible amendment of national constitutions, to require a quid pro quo to the common weal for government largesse (from every level of government) to corporations that would deter smaller government units from competition for corporate location by means that undermine local economies;
5. The definition of terms such as "common weal" and "government largesse", etc. and mechanisms for responsible parties, such as labor-venture funds, community development financial institutions, credit unions, and other certifiably locally controlled financial institutions to hold the quid pro quo stock responsibly in a manner that would encourage public markets to continue to invest in these companies and communities;
6. Create a public sky trust to receive payments in cash or stock for pollution by energy companies;
7. Work with the European Federation of Employed Shareholders (EFES) to develop a European policy direction that encourages broad ownership throughout Europe while allowing for the differences in cultures, laws and circumstances in the various countries;
8. Examine the benefits and limits of European co-determination as now practiced, and develop a means to combine the best features of co-determination with those of employee ownership while retaining or increasing access to necessary capital;
9. Explore mechanisms for labor-sponsored venture funds to use employee ownership as an exit strategy;
10. Create a hybrid of consumer and employee ownership for privatization of existing publicly owned companies such as utilities;
11. Research methods used by international organizations, such as the World Bank, to persuade global companies to indiginize their workforces to determine if such methods could be utilized to get similar companies to extend ownership to greater numbers of employees;
12. Model the effects of creating a sliding scale capital gains tax providing no tax on capital gains for families with incomes below $100,000 and increasing the capital gains tax in proportion to the combined earned and unearned income of individuals and families above that figure;
13. Model the financial, social and capital access impact of removing corporate income tax from all 100% employee owned companies;
14. Model the financial, social and capital access impact of creating time limits on returns capital investment (similar to copyright laws).

3) One of the difficulties in dealing with international corporate power is that corporations have outflanked national control by becoming global. To respond effectively, similar policies must be promulgated in as many countries as possible. This Project aims to focus the attention of an international Network toward creation of policies that could be viable in many countries. We hope to follow up with future projects elaborating the details of policy proposals and pilot projects testing the policies in practice.

B. Employee ownership in privatization: an analysis of the uses (and abuses) of employee ownership in the privatization process internationally.

Employee ownership has been used as a privatization strategy in such diverse countries as Britain, Chile, Egypt, Jamaica, the United States, and Zimbabwe. It has, however, been most generally used in privatization in the former socialist countries of Central and Eastern Europe, the former Soviet Union, and in the People's Republic of China. It has been initiated under leaders of widely divergent political persuasions such as Margaret Thatcher, Bill Clinton, Mikhail Gorbachev, and General Pinochet.

C. Broadening employee ownership transnationally: the role of international actors and agencies.

This working group will explore (1) structuring broad employee ownership in multinational corporations; (2) how international agencies / aid agencies can encourage broader employee ownership with an analysis of their experience with this (USAID in Egypt; InterAm Development Bank in Jamaica); (3) the experience with organizing transnational bodies to support employee ownership such as the European Federation of Employed Shareholders; (4) the possibility of imposing a transaction tax on certain speculative global economic transactions (a tiny transaction tax on international currency speculation would be a powerful funding tool); (5) consider avenues to put employee and other forms of broader ownership into the mainstream of international development efforts through UN agencies such as the UNDP and the ILO, and through international finance agencies such as the World Bank; and (6) other methods for broadening ownership through transnational actions.

The intent is to look at best practices of transnational actors & spread them.

D. Building employee ownership at the national level: canvass the range of national legislative choices to promote employee ownership and their relative advantages and disadvantages. This includes (1) tax expenditures such as deductible contributions or tax credits, (2) national support for technical assistance, (3) preferential lending policies, (4) equity funds, (5) support for cooperative start ups, (6) national managerial academy, (7) development of national organizations of employee-owned companies, and (8) other ideas for strengthening employee ownership at the national level through national legislation or national organization.

In looking at the international experience with all of these, we aim to find the best practices and spread them, understanding that "best practices" may mean different practices in different environments.

Currently active Network members have substantial anecdotal information and some data on employee ownership practices and proposals (including ESOPs, co-ops, profit sharing and ownership of stock through pension plans) in many countries including: Australia, Belgium, Canada, China, Chile, France, Hungary, India, Ireland, Italy, Jamaica, Mozambique, Netherlands, Poland, Russia, Spain, Sweden, UK, US, Zimbabwe, and co-determination practices in Germany, Austria and Denmark.

We need to collect this information, along with similar information on countries not mentioned above, and make it available to all Network participants in a useable form.

Additionally, many Network participants are interested in not-for-profit employee ownership education and technical assistance programs (EOTAs). Some of them are veterans of long-lived successful EOTAs. Some are seeking to create them. Others are struggling to keep alive formerly government supported programs which have lost government support. Some of these organizations are grant supported, others support themselves on fee generated income. Some provide technical assistance on transactions, while others limit themselves to providing information. Some are neutral information sources, while others are advocates. Some are government agencies, others are private. Anecdotal data tell us that these information sources are key players in broadening ownership. This discussion group will be a forum for these participants to meet, exchange information and assistance, and possibly help launch or merge struggling groups to increase worldwide EOTA capacity.

E. Building employee ownership at the subnational level: international experience with state, regional, provincial, and city policies in the public and private sector to support the development of various forms of employee ownership. This includes both programs to support the development of more employee-owned firms at the micro level and those to support improving the performance of existing employee-owned firms through high performance management and workplace practices. This group will look as well at experience with developing training programs for employee ownership, both for non-managerial employees and management; local loan and equity funds for employee-owned companies; at employee-owned company networks, and joint institutions which they can develop, such as purchasing, sales, and export cooperations; and at the integrated employee-ownership support system like those in Mondragon and what is developing in Quebec.

Here too the goal is to identify best practices and spread them.

Should the project prove sufficiently successful to lead to further funding after this exploratory project, it would be our expectation that these facilitation and secretarial duties will be dispersed internationally, and that the individuals involved will be paid for their time.

4. Focusing the Discussion Towards Action

1. Summarize results to set the stage for policy initiatives.

The facilitator for each of the working groups will produce a paper summarizing the discussion results in a form suitable for dissemination after the 9 months of workgroup meetings. The summaries will specify areas in which participants believe that policy initiatives can be undertaken successfully, as well as areas in which participants think additional policy research is necessary. They will seek also to establish a consensus on best practices. The working groups will discuss and refine the summary papers.

2. Guide and direct the Network.

The Project is structured to continuously build a broad international network of those interested in broadening the ownership of capital within the global market economy. Thus the project includes, in addition to staff, the COG Network and a Policy Advisory Board (described below in the Capacity section); together the individuals who have agreed to be involved have the capacity to catalyze a vigorous debate on broadening ownership of productive assets nationally and internationally.

A small but representative Executive Committee advises the staff on development of the Project. Each quarter the Executive Committee will hold an electronic meeting to oversee Project direction. They will undertake a mid-term and final evaluation of the Project.

3. Building the Network

The Network is intended to continue to grow continuously. The staff is charged with doubling the Network from its current 70 participants including adding at least 75 new participants from outside North America during the 15 month Project period. All Network members will receive materials, information and encouragement to aid them in building the Network continuously.

4. New Network Discussion/ Action Groups

The web site housing the virtual conference center with the initial five funder-required discussion groups is not yet on-line. Yet, already we have requests to form additional discussions based on specific countries, regions, languages, interest groups, etc. We plan to create these as soon as the initial five are in place. However, we do require every Network member to participate in one of the initial five groups. We believe that the facilitated discussions in these five areas will enable the cross-fertilization of ideas from diverse Network members that we need to focus the Network’s members towards constructive joint action.

V. Timeline of Project

Month 1. Project Coordinator and staff write the concept paper outlining the problems around increasing globalization, particularly in the areas of inequality in income and wealth, and the utility of employee ownership as a national and international strategy to increase economic equality, to anchor capital, and to increase democratic input into corporate governance. This paper is designed to frame the issues for Network participants.

The concept paper will be made available on-line through the new COG web site and library at KSU, and will be linked to related organizations' sites to encourage access.

Months 1 - 3. Electronic construction of (1) COG's "virtual conference center" conference rooms for individual working groups within that center for real-time electronic conferencing and "threaded discussions" on specific research on policy issues, (2) a library for discussion archives and papers, and (3) a web site created by Kent State's New Media Services.

During these months of the Project, staff will convert the primitive e-mail system used to date to a listserv system, supported by Kent State University.

Months 1 - 3. Project Coordinator (PC) and project staff complete recruitment of at least 75 international Network members in addition to the existing American members. (We have identified 60 additional international participants to invite in this proposal.) Participants provide electronic biographies and publications they consider appropriate for our on-line library. Network members may participate in one or several working groups.

Our design of the electronic architecture for the group permits its continued growth beyond this core group. COG will continually seek new Network members and will strive for maximum inclusiveness. While COG will also use conventional mechanisms (print, mail) to do this, as befits a "virtual think tank" COG will develop electronic links beyond its existing email network and broaden those links internationally.

Month 3. First real-time electronic Executive Committee meeting. These will continue to occur every quarter for the during of the project.

Months 4 - 12. Establishment of "conference rooms" within the "virtual conference center" for more specialized working groups and subnetworks; facilitated monthly real time discussion with facilitation by a staff member; discussion summaries prepared by staff and cataloged in virtual library. We anticipate that each monthly meeting will last about 3 hours. This discussion should enable the staff to begin to outline comprehensive, alternative policy structures to broaden employee ownership of productive assets in each working group area. We do not anticipate fully fleshed out policy white papers, however.

Recruitment for the Network continues throughout this period. International membership is expected to reach at least 150 by the end of the Project.

Month 9. Midway review of the Project and evaluation by the Executive Committee.

Month 12. Write up of summary of 9 months of working groups' discussion and proposal for working group outcomes and recommendations for next steps, including development of policy white papers and implementation of policy proposals, prepared by staff for each of the groups and disseminated to each working group for discussion.

Months 13-14. Discussion of these. Staff revise to reflect discussion.

Month 15. Final project report is drafted, drawing together the working groups' reports, including presenting next steps, and is disseminated.

These summary results will also be disseminated electronically; the papers will be disseminated to COG's Network and Advisory Board members electronically; and they will be available on the COG web site.

Project staff will develop an inclusive e-mail listserv disseminating policy papers internationally beyond COG's core group: we will focus on adding labor, religious, community, environmental, and other groups to the employee ownership community. This list will be international in scope. The development of this listserv will underpin all of COG's work, but it will be particularly valuable for dissemination of the summary report of COG policy discussion. We expect it will eventually include 75 to 100 organizations internationally.

Furthermore, the organizations represented in the Network and on the Policy Advisory Board also have extensive web sites and publications through which to disseminate these findings.

We anticipate distribution, as well, in hard copy to the media and to labor unions, employee ownership organizations and companies, organizations of local and state governments, business associations, libraries, schools, foundations, religious social action and leadership bodies, community economic development professionals and community organizations.

In Months 12 and 15, the COG Executive Committee meetings will be dedicated to strategic planning enabling this group to develop continuation and implementation strategies based on the electronic discussion results and practical political experience. The purpose of this strategic planning will be to:

a) Review group discussion;

b) Evaluate the potential impact of alternatives presented;

Prior to the final Executive Committee meeting, the Project Coordinator will distribute and collect an evaluation of the project; this will be presented for discussion and revision at the final session of the Committee.

VI. Project's Deliverable Products

The following are the major products to be created by the Project:

This Project will inform and encourage coordinated action between diverse economic and social groups (including employee-owned companies, organized labor, community and religious organizations, business organizations, professionals, academics, media and policymaking opinion leaders) from many countries around the common theme of broadening ownership.

COG is a virtual think tank. Its Network members already include most of the outstanding thinkers and practitioners in the employee ownership community in the United States and a number of selected foreign experts. The project will grow COG's group of foreign experts from approximately 20 to at least 75 at the end of the third month, when we start the electronic discussions, and 150 by the end of the Project.

Because of varying computer and modem capacity, the "virtual conference center" is primarily textual; with standards set to a low common denominator. However, participation still requires access to the web. Practically all current COG participants have that access.

This will give us the following capacity:

(1) to conduct interactive forums where people converse (in text) in real time; that discussion will be moderated by a staff person;

(2) to hold committee meetings in real time in a number of different conference rooms within the conference center;

(3) to maintain an archive of this discussion which will be available to the participants after the discussion is concluded;

(4) to continue "threaded discussions" of the committee topics with a staff person receiving input between real time meetings and sending that discussion on to each committee room;

(5) to build a "library" in the virtual conference center which would be full of compressed files of the COG papers and archived discussions, as well as other papers put onto the web site (participants will need Adobe Acrobat to pull down these papers); and

(6) to create a listserv to let people know that something new has been posted on web site; we'll distribute an abstract of the new papers through the listserv.

It may also be possible to develop inexpensive internet international phone conferencing before the end of the Project.

This electronic structure will enable the Project to bring together international expertise from universities, think tanks and non-profit organizations, unions, and practitioners both in the professional community and in employee-owned companies as well as the national organizations serving various functions for the employee ownership community. COG's distinct mission is to increase the base of support for broad ownership beyond these organizations by building a coalition with a much broader constituency around shared values. COG's Policy Advisory Board reflects this coalition effort while the COG Network provides specific ownership expertise.

It also enables us to build an international discussion and network very inexpensively. Once the electronic structure is in place, the marginal costs of adding international participants is approximately zero.

To succeed in its goals of changing wealth distribution patterns, COG will need to find means for Network participants to meet each other in person. However, the electronic Network is an extremely cost effective starting point for this effort. Even in its makeshift initial form, it has helped people from the US, Australia, Canada, Chile, Europe, Africa and India to trade ideas on policy proposals and creation of support organizations.

VIII. COG Mission, Goals & Objectives

"To create a coalition that promotes broadened ownership of productive capital, in order to reduce inequality of income and wealth; increase sustainable economic growth; expand opportunities for people to realize their productive and creative potential; stabilize local communities by improving living standards; and enhance the quality of life for all."

The following goals and objectives are in rough chronological order. Therefore, the later goals and objectives are less clearly formed than the earlier ones.

B. COG Goals (in bold) and Objective (in italics) are:

1. Clarify the factual case underlying our mission

1. "Obtain research "( meaning "collect existing research and commission new research if needed") on the effects of broadened ownership on community economic development, company financial performance, and wealth creation in the local community;
2. Obtain research on the dimensions of existing broadened ownership programs, and their utilization in a wide variety of countries and circumstances. Find out which ones have the greatest impact and why.
3. Develop an analysis of the most effective existing means of broadened ownership and why they are effective.
4. Based on this and other economic data, develop policy proposals for improving the means and effectiveness of additional broad ownership mechanisms.

1. Broadly disseminate information supporting our mission

1. Publish scholarly and lay materials explaining our research, policy proposals and public opinion data.
2. Actively seek media exposure for these ideas and examples of them in all forms of media
3. Utilizing the diverse contacts of our diverse Working Group, Advisory Board, and staff ingenuity, seek to open the discussion of broad ownership as a solution to a variety of social ills in as many forums as possible.
4. Build a broad and diverse coalition supporting our mission, and make an effort to keep the discussion of mission open enough to foster ongoing inclusion of new groups.

1. Find out what the public knows and cares about concerning capital concentration, the problems it generates, and the public’s perception of broad ownership schemes as a potential solution.

1. Commission public opinion research to provide COG with objective data on this question.
2. Analyze this research and determine a public education strategy based on it.
3. Utilize this information to formulate a strategic plan for implementation of broadened ownership policy proposals.

1. Find out what opinion makers know and care about concerning capital concentration, the problems it generates, and the opinion makers’ perceptions of broad ownership schemes as a potential solutions

1. Commission public opinion research to provide COG with objective data on this question
2. Analyze this research and determine a policy leader education strategy based on it.
3. Utilize this information to formulate a strategic plan for implementation of broadened ownership policy proposals.

1. Develop policy alternatives to actualize our mission

1. Commission policy papers proposing policies aimed at solving the problems caused by capital concentration; utilizing the research we obtain on the forms of broadened ownership which show positive social effects; and which have the greatest potential for actualization based on the public and leadership opinion research we obtain.

1. Build a broad coalition supporting our mission

1. Create a Working Group comprised of people knowledgeable and experienced with broad ownership from business, labor, government, and academia.
2. Create an Advisory Board of opinion leaders from a wide range of disciplines with concerns about the problem of capital concentration and interest in broad ownership as one potential solution.
3. Utilize our public education and technical assistance mechanisms to reach out to diverse constituencies and engage them in discussion and joint work in those areas where our concerns and theirs are similar.

1. Provide solid data and policy proposals supporting our mission to policy makers, opinion makers, the media and the general public

1. Create a compilation of economic data, opinion research and policy proposals to provide coalition members, the public, and policy makers with the information needed to create workable policies aimed at achieving COG’s mission.
2. Create books, pamphlets, articles and encourage development of materials in all media to disseminate our data and proposals, including providing to the public speakers, data, proposals and expertise for development of broad ownership policies and mechanisms.

1. Create and Enhance examples and models of co-ordinated broad ownership systems

1. develop and support projects that strengthen these existing institutions:
2. Gather data on the relationship between state supported employee ownership technical assistance, and, for example, the incidence of economically successful employee owned companies and the growth of personal wealth amongst the general population in the communities where employee ownership exists.
3. Create new mechanisms to strengthen these collaborations, for example: joint bonding authority for a group of small employee owned companies, employee owned industrial parks with shared secondary institutions; models for virtual employee owned companies; an employee owned version of a union hiring hall; create a business succession program involving development banks, technology resources and empowerment zones based on the idea of the Mondragon Bank R&D department, etc.

1. Develop technical assistance capacity, materials and replication programs to:

1. Disseminate research and policy proposals supporting our mission (described above)
2. Assist local organizations create policy or programs to broaden ownership (described above)
3. Replicate or improve upon models of co-ordianted broad ownership systems (described above)
4. Create TA capacity, educational materials and replication programs for long term growth and capacity building in the broad ownership sector.

1. Co-ordinate policy development in many countries to create policies that raise the social wage floor, without sacrificing development opportunities for poor countries.

1. Maintain this goal as a guiding principal in strategy and policy development.
2. Begin with policy development in the developed countries where common people have the greatest economic and political power to effect change and bring leverage in relationship to global corporations.
3. Expand policy development to, and learn from, developing countries where there are social, economic and political openings to explore broadened ownership.

1. Include on the Working Group and Advisory Board members from many countries so that programs and policies are developed considering perspectives and needs of people in both the developed and the developing world.

IX. COG Leaders, Members and Staff

(Dan or Frieda - please check , update & list from letterhead (see below) and registrations since we wrote the grant)

The Project is supervised by an Executive Committee, which is actively involved with the staff in developing the project through quarterly electronic meetings.

The Project has recruited a Policy Advisory Board comprised of a broader circle of economic policy experts. Advisory Board members are drawn from a variety of walks of life, including labor, business, religious, public interest and community groups; their common denominator is their personal commitment to a more egalitarian distribution of income and wealth which lies at the heart of the Project.

Collectively, those involved in COG have the ability to initiate a debate on broadening ownership of productive wealth. This Project will serve to catalyze this debate.

During the Project, COG will build a solid and cost-effective foundation for international electronic communication, including a "virtual conference center," library, and real time electronic meetings. This electronic structure is designed to be open-ended so that the number of participants can grow, and it will continue, after the termination of the project, with limited funding.

This project's strengths can be summarized as (1) the capacity for developing viable policy alternatives that can broaden the distribution of ownership internationally through subnational policy, national policy, and international corporations, agencies and national governmental cooperation; (2) the linkages around broadening ownership nationally and internationally between practitioners and policy experts from organizations which otherwise rarely work together; and (3) the open-ended architecture of the group, structurally and electronically, which both facilitates sub-networks and can build a broader coalition to extend ownership nationally and internationally which will outlast this project's funding.

Staff for the project are:

Project coordinator, Attorney Deborah Groban Olson is: a leading ESOP attorney who has published numerous law review articles on various aspects of broadening ownership; chair of the National Center for Employee Ownership (NCEO); chair of COG, and represents the US on the board of the newly formed European Federation of Employed Shareholders.

Principal investigator is John Logue Ph.D., (Princeton University, 1976) is Director of the Ohio Employee Ownership Center and Professor of Political Science at Kent State University.

Dan Bell is OEOC international program coordinator. He has lived and worked on employee ownership in Russia and Chile. He has done short projects on contract in Belarus and Hungary and will help staff and facilitate one or more of the working groups and write up the results.

Steve Clem is an OEOC program coordinator and former research and international affairs director of the United Rubber Workers, will help staff and facilitate one or more of the working groups and write up the results. He will also serve as international labor liaison.

Rosemary DuMont, Director of Kent State University's New Media Services, will oversee the implementation of the virtual conference center and associated electronic meeting, communication, and dissemination facilities which are integral to this project.

We see this Project as part of a broader array of research and policy development efforts to respond to the issues and problems raised by economic globalization and the escape of corporations from national regulation. The authors of this proposal are familiar with, and have participated in, a number of other initiatives in this general field in the United States and Europe. This project will complement those efforts, rather than duplicate them.

A. The COG Executive Committee for the Project

A smaller, but diverse portion of the Network and Advisory Board, described below, has agreed to serve as our COG executive committee, which will be more directly involved in the development of the Project and review the staff’s work. The executive committee includes:

Per Åhlström (Sweden), Editor-in-Chief of Nya Norrland;

Clark Arrington, Chairman, Equal Exchange (an employee-owned international trading company, trading with co-operatives in Africa and Latin America)

Dr.Itil Asmon (Zimbabwe), Zimbabwe Enterprise Development;

Congresswoman Carolyn Cheeks-Kilpatrick, 15th district, Michigan;

Carla Dickstein, Research Director, Coastal Enterprises;

Sister Mary Ellen Gondeck, Sisters of St. Joseph;

Julia Markus (Canada), Exec. Director, Employee

Share Ownership and Investment Association of Canada;

Mary Landry, Chairman of Board, Maryland Brush Co, and president, Maryland Labor

Education Association;

Mary Mitiguy, Organizational Development Director, Carris Reels, a Vermont employee owned company

Prof. Manuel Riesco (Chile), Centro de Estudios Nacionales de Desarrollo Alternativo;

Corey Rosen, executive director, National Center for Employee Ownership;

John Simmons, Participation Associates;

Joan Stockinger, Crocus Fund (Canada); and

Lynn Williams retired president, Steelworkers.

The Executive Committee will hold real-time electronic meetings quarterly.

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B. Policy Research Capacity of COG Network Participants

COG's initial base of operation is the employee ownership community of

companies, state and non-profit agencies and professionals in the United

States, and their counterparts throughout the world. COG's Network is an unincorporated network of employee ownership experts and practitioners from many walks of life, initially established as a committee of the National Center for Employee Ownership (NCEO). COG has

held three meetings in conjunction with the NCEO's annual meetings in 1997 and 1998 and the NCEO's board meeting in October 1997; about 30 people have attended each meeting.

COG's Network provides both policy research and policy

dissemination capacity. It includes many of the most knowledgeable

practitioners in employee ownership and researchers in the field. Its

members are:

Michael Anderson, Davis Cowell & Bowe, labor securities attorney

Dan Bell, International Program Coordinator, Ohio Employee Ownership

Center, Kent State University

David Binns, Assoc. Director, Foundation for Enterprise Development

Ed Carberry, National Center for Employee Ownership (NCEO)

Bill Carris, President & CEO, Carris Reels, an employee owned company

Steven Cludts, Catholic University Leuven, Belgium

Carla Dickstein, Research Director, Coastal Enterprises, Inc. (Maine's

primary community development organization)

Rosemary DuMont, Director of New Media Services and Interim Director of

Academic Computing and Technology, Kent State University

David Erdal, Chair, Job Ownership Ltd., UK

Jennifer Garvey, Atty. at KPMG in Maputo, Mozambique after 20 years w/ the Mozambican government

Prof. Patrick Guiol, Universite de Rennes, France

Bessie House, Black Entrepreneurship Project, Kent State University

Bruce Householder, Exec. Director, Worker Ownership Institute, United

Steelworkers of America

David Johanson, employee ownership attorney

Jalmer Johnson, Research Director, Air Line Pilots Association

James Keogh, Department of Community Trade & Economic Development,

State of Washington

Peter Kardas, Labor Specialist, Worker Center, AFL-CIO, King Co.,

Washington

Olga Y. Klepikova, Foundation for Russia's Economic Reform, Moscow

Norm Kurland, Director, Center for Economic and Social Justice

Mary Landry, Board Chair, Maryland Brush, an employee-owned company,

and president, Maryland Labor Education Association

John Logue, Director Ohio Employee Ownership Center, Kent State

University

Dennis Long, President, BCI Group

Lars Lindqvist, Handelshøjskole [School of Business Administration],

Copenhagen, Denmark

Janos Lukacs, Managing Director, Share-Participation Foundation, Hungary

Atty. Ronald Ludwig, Ludwig, Goldberg & Krenzel (employee ownership

attorney)

Chris Mackin, Ownership Associates

Julia Markus, Exec. Director, Employee Share Ownership and Investment

Assoc. of Canada

Andrew Martin, President, Annie's Home Grown

David Morris, Vice President, Institute for Local Self-Reliance

Deborah Groban Olson, Chair, NCEO and COG, principal, Shared Equity Strategies, Inc.

Marc Mathieu, Director, European Federation of Employed Shareholders

Tim Mitchell, Exec. Dir., DGI Projects Party, Ltd. And labor attorney, Australia

Mary Mitiguy, Organizational Development Director, Carris Reels, an employee owned company

Marc Mortier, Secretary General, Institute pour la Participation dans

L’Enterprise Belgium

Prof. Andrew Pendelton, Manchester Metropolitan University, UK

Corey Rosen, Executive Director, NCEO

Loren Rogers, Ownership Associates

June Sekera, Corporation for Business, Work & Learning, State of

Massachusetts

André Schleiter, Economics Director, Bertelsman Foundation, Germany

Rainer Schülter, Ex. Dir., European Confederation of Worker Co-operatives and Participative Enterprises (CECOP), Belgium

Sid Scott, Woodward Communications (an employee-owned company)

Bob Shinners, Loan and Investment Officer, Coastal Enterprises Inc.

John Simmons, President, Participation Associates

Bob Smiley, Benefit Capital Inc.

David Spitzley, Family Independence Agency, State of Michigan

James Steiker, Shared Equity Strategies, Inc., employee ownership attorney

Joan Stockinger, Crocus Fund, Manitoba (Canada)

Viktor B. Supyan, Deputy Director, Institute of the USA and Canada,

Russian Academy of Sciences

James Tussler, Washington State AFL-CIO

Ryan Weeden, NCEO

Lynn Williams, Retired President United Steelworkers of America, and

Co-Chair, Worker Ownership Institute

Prof. Jacqueline Yates, Kent State University

COG's Network is an open organization, and we anticipate that others will join COG's Network during the Project. We will be doing particular outreach to those outside North America and Western Europe and those who have not previously been involved in employee ownership, including specifically those from religious organizations, labor, agricultural and consumer cooperatives, minority organizations interested in economic development, and economic development groups interested in anchoring capital and job retention. COG's electronic architecture permits adding members without adding significant costs. This is true internationally as well as domestically.

C. Policy Implementation Capacity - Board of Advisors

To reach beyond the employee ownership community represented in COG's

Network, we have established an Advisory Board for this Project.

It is comprised especially of those who are well positioned to influence

the implementation of policy in this field. The following individuals

have agreed to serve:

Per Åhlström, founder of the Swedish labor venture fund,

LO (Swedish Labor Federation)

Editor-in-Chief of Nya Norrland and author of I egna händer: Om

löntagerägande i USA och Kanada (1998) ("In Our Own Hands")

Gar Alperovitz

University of Maryland

Clark Arrington

Chairman, Equal Exchange (an employee-owned trading company)

Itil Asmon

Zimbabwe Enterprise Development

Harare, Zimbabwe

Margaret Blair

Senior Fellow, Brookings Institution

Norm Brennan

Retired CEO of employee-owned Dimco-Gray

Founder & CEO of Brennan Consulting

Honorable Carolyn Cheeks-Kilpatrick

Congresswoman, 15th U.S Congressional District, Michigan; member, House

Banking Committee

David Ellerman

Economic Advisor (DECVP), Development Economics (DEC)

The World Bank

Richard B. Freeman

Professor of Economics

Harvard University & The National Bureau of Economic Research

Leo Gerard

Secretary-Treasurer, United Steelworkers of America, AFL-CIO, CLC

Mary Ellen Gondek, SSJ

Sisters of St. Joseph

Office of Peace & Justice Concerns

Jennifer Herren

Manager, People Communications

United Airlines (employee owned company)

Judith Mastin

Senior Investment Specialist

Union Bank of California

Martin Mayer

General Executive Council, Transport & General Workers Union

Sheffield, UK

(former worker director of employee-owned Mainline Buses)

David Morris

Vice-President, Institute for Local Self-Reliance

Marc Mathieu

Director, European Federation of Employed Shareholders

Brussels, Belgium

Ralph Nader

Consumer Advocate

Patrice O'Neill

Executive Producer of "Livelyhood" television program

Ranier Schluter

Gen. Sec’y.,

European Federation of Worker Co-ops (CECOP)

Prof. Manuel Riesco

Chile

Robert H. Scarlett

Chairman, Durex Products (employee-owned company)

Dr. René Schindler

Sekretär, Metal Workers Labor Federation of Austria

Shann Turnbull, Australia

Author, Democratizing the Wealth of Nations from New Money Sources and

Profit Motives

Prof. Francine Van Der Bulcke

Director, Office of Workplace Financial Participation

Katholieke Universiteit

Brussels, Belgium

Lynn Williams

Retired President of USWA

Co-Chair, Worker Ownership Institute

X. Beyond this Pilot Project

During this development period, COG will develop at least five working groups. These will be facilitated by staff members and will yield written surveys of their areas and possible policy alternatives to form the basis for subsequent work. Following this fifteen-month development period, we expect that Network members will move to the stage of writing policy papers and implementing those alternative policies. We expect that the Policy Advisory Board will play a significant role at that point.

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