Who owns the spolu? How are profits distributed?
In the previous section, I mentioned that the corporate world has the investors as the ultimate decision-makers of the corporation. The co-operative world has the customers or employees as the decision makers.
The spolu is going to bring in these stakeholders together:
1) investors,
2) employees,
3) customers, AND
4) suppliers AND
5) philanthropy.
These entities will send their own representatives to the senior management team (analogous to the “board of directors”). These entities will also share the profit distribution.
The Spolu Investors
A new spolu will need seed capital to start. Investors will come together to provide that seed capital. In exchange for their money, the investors will get shares in the spolu.
Spolu investors can be individuals, other spolus, mutual funds, corporations, and government.
Allowing “corporations” to invest in spolus kind of sounds like another version of the corporate world. Well, there is a big difference. These corporate investors will have to share decision making and profits with the other stakeholders. Many corporate investors will not like this arrangement. If so, they should stay away from the spolu network.
As well, the spolu should have a mechanism where investors slowly lose their equity in the spolu. For example, after a 10-year period, the original investors could have about 50% of the spolu shares as they used to have. In this way, the spolu, in the future, can more easily find capital for an expansion. The original investors will not be owners in a “forever sense.” I will provide more details on this feature later.
When distributed profits are declared, the investors will share those profits with the other stakeholders, as per the spolu’s articles.
The Spolu Employees
All spolu employees will be eligible to receive the spolu’s distributed profits and participate in the management structure (as per the spolu’s articles).
I recommend that all employees are eligible for the profit distribution, not just the employees who belong to the spolu network.
When distributed profits are declared, employees will get their share, as per the spolu articles. I recommend that the employee earnings of for the past three years should be considered in the calculation. In other words, employees are fully vested after three years of employment.
“Why the three-year period?” you might ask. Well because this recognizes the employee efforts and contribution made from three years ago has had an impact on where the spolu is today: in a position to distribute some profits. I think three years is a good time frame to connect the past with the present.
Employees with less than three years still share in the distributed profits. But because they are not fully vested, they will not be receiving as much of the profit distribution as the vested employees.
Once a year, the employees’ distributed profits will be added to their paycheck. It will be considered as regular income, subject to the usual taxes and other payroll deductions.
I am also expecting employees to take a bigger role in decisions of the spolu. While they will be selecting which employees become part of the senior management team, they should also have more decision-making power in their employment sphere. I recommend that spolu managers study various techniques like sociocracy or consultation to give employees more control. In my opinion, spolus should be more horizontal than today’s corporations.
I also recognize that many employees have a rather poor understanding of the challenge and difficulties of running a business. I am preparing a business primer for employees to study.
The Spolu Customers
Customers can get a share of the distributed profits. However, only the customers who are members of the spolu network are eligible.
If the spolu customers are individuals, they would have their “spolu card” to record their transaction(s). This will be used later to calculate their share of the distributed profits. If the customer is another spolu, then there would be an accounting mechanism to record all the purchases — and later apply and move the appropriate share of distributed profits to that customer.
Spolus can seek the business of non-spolu members. But the profit distribution will not go to these customers.
The Spolu Suppliers
Putting the suppliers in the profit distribution is a novel concept. Suppliers have an important role in the success of a spolu. So why not include them in the profit distribution?
Similar to customers, suppliers must be members of the spolu network to be eligible for these distributions.
Consider this business relationship. Spolu A is a customer of Spolu B. This makes Spolu B a supplier of Spolu A. So once a year, both spolus do their profit distribution calculation. If both are profitable, they will be sending a little money to each other.
This spolu connection can help a weaker business. If Spolu A is quite profitable, then some of that profit was a result of its business dealing with Spolu B. But if Spolu B is struggling and cannot afford a profit distribution, the profit distribution from Spolu A will help Spolu B’s cash flow. In this way, Spolu A is less likely to lose Spolu B as a supplier because of business failure. The connection is more likely to survive.
In another year, the situation could be reversed. In other words, the customer to supplier bond is strengthened in the spolu network.
Remember, “spolu” equals “together.” Neat idea, right?
The Spolu Philanthropy
I recommend that each spolu adopt five or so charities as a target for the philanthropic portion of profit distribution. These charities and donations will be public knowledge.
I recommend that the spolu promise each charity at least four years of support. In this way, the managers of that charity can make longer-term plans. Today, so many charities cannot see much past a year of operations because finances come in and go away so easily.
I recommend the philanthropies send one representative to the senior management team. This member will definitely have a different perspective to bring to the decision making.
Published on Medium 2024
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