You’re an ESOP company. Hurrah! The best way to solidify your status as a successful employee-owned company and to take maximum advantage of the benefits of employee ownership is to have a robust and effective Communications Committee. If you don’t have one, here are a few suggestions to help get started. And if you already have one, maybe these tips will help you nurture and empower it.
1. Talk with your ESOP Administrative Committee and Senior Management (including HR)
There is some overlap between the tasks that can be handled by the ESOP Administrative Committee, your HR department, and the ESOP Communications Committee. It’s helpful to gather representatives from all three to sort out what tasks will be handled by which group. All three groups should also discuss what the makeup of the Communications Committee will be.
The ESOP Administrative Committee and the HR team have a number of tasks that will require some special familiarity with ERISA and the ESOP plan terms. On the other hand, the Communications Committee can often be used as an avenue to bring a broad array of employees into an active role with the ESOP. This discussion can include review of which groups and divisions within the company might benefit from direct representation on the Communications Committee. The main tasks of the Communications Committee are just that: communicating to employees the important benefits of working for an ESOP-owned company, and making sure employees understand how vital it is for them to adopt an ownership mentality in their work. The Communications Committee can also serve as an information resource for employees.
The ESOP Administrative Committee, HR and the Communications Committee should also discuss calendar coordination. All three will likely have some activities tied to the annual valuation and share price announcement. Confirming the timing of that annual process would be very helpful.
2. Pick the Committee
There is no legal requirement for size or make-up of the Communications Committee. Avoid making it so big that no one feels a need to take an active role and avoid making it so small that you burn everyone out. Depending on the size of your employee base and how geographically diverse that is, your Communications Committee could have anywhere from three to 12 members.
In addition to setting the size, decide whether to have a management sponsor (vs. having a management member on the actual committee). Some feel that it is best to keep management off the actual committee to avoid a risk of having the management member assume an outsized role (either because everyone defers to them or because they are used to being an arbiter and decider in other company activities).
Decide what terms of office and term limits will apply for membership on the Communications Committee. And decide how future committee slots will be filled. One option is to have the ESOP Administrative Committee and management pick the initial set of members and over time let the process evolve to empower the current committee to self-select its successors.
The key skills for serving on the Communications Committee include a basic knowledge of ESOPs (or an ability and willingness to learn), an outgoing personality, and a certain comfort level handling hard questions and communications with employees at all levels within the company.
3. New Hires
Talk to HR and coordinate your outreach to new hires and your onboarding processes, as they touch on the ESOP. Make sure you sync up your events with HR. If HR is doing an in-house session on planning for retirement or financial literacy, the Communications Committee could be in the room and/or provide resources.
4. Educate the Communications Committee on their Jobs as Committee Members
Although the Communications Committee does not need the in-depth training that your HR team or your ESOP Administrative Committee needs, you do want to make sure they are able to handle the job.
- Create and share a Committee Charter. - Discuss your purpose and goals. And invite input from Committee members.
- Cheer School. - Emphasize the importance of keeping an enthusiastic ownership spirit alive in the company. Talk about how the Committee can tout successes and explain dips in the road.
- Advocacy. - Your Communications Committee can be a booster for ESOP ownership, both in an inward-facing way to your employees and in an outward-facing way, when interacting with the community and local/national politicians who represent the company.
- Team Building. - Consider having a regular team-building exercise to keep the group cohesive and enthused.
- ESOP 101. - Make sure they know the basics and answer all their ESOP questions. Empower them to carry that information into the workplace and to report back with any questions they couldn’t answer on their own.
- Association Conferences. - Consider setting a calendar for when and where your committee members will attend ESOP conferences. They don’t need to go to everyone, and they can start with smaller, local ones to get their feet wet. Those are a convenient way to meet other Communications Committee members from other companies, trade war stories and build a network.
