Among the recipients of recently paid dividends by Innscor Africa were the employees. Innscor in compliance with the Indigenisation and Economic Empowerment created an employee share ownership scheme. In a time when the employee has become a victim of the economy, this is considered very good news and perhaps a ray of hope.

The Indigenisation and Economic Empowerment Act was a very controversial piece of legislation and at many times it was, perhaps incorrectly, blamed for stifling investment. With Act gone and investment still very low perhaps the conditions for business including the fuel, power, enforcement of contracts, foreign currency shortage and inability to repatriate funds need to receive attention. So while the legislation was hastily repealed its proponents say this is Perot that the law had many positives.

The employee share ownership schemes are not simply a matter of dividends. The Innscor scheme provides facilities and other essential needs of employees such as housing, retiree loans and revolving loan facilities for existing employees. In this regard share ownership trusts are more adept at dealing with employee welfare. Essentially giving the employees, at least through the board of trustees, control over their welfare through sharing in the business they work to build. Innscor counts Simbisa Brands, Colcom, National Foods and ProBrands among its subsidiaries.

The policy was adopted in many companies including British American Tobacco and Zimplats. In a perhaps related development, Metallon Gold which recently took the government and the Reserve Bank of Zimbabwe to court over amounts they say were unpaid for gold exports to the tune of US$132 million have considered giving unpaid employees shares in Mazowe mine as compensation. Now, of course, this move is out of desperation. Shareholding in a company that can not afford to pay its employees would represent undesirable shareholding.

The employee share ownership schemes were set up in much friendlier times. The current situation is s far cry from that with rampant inflation now at 75% year on year and largely static salaries. Yet this scheme is clearly providing benefits to employees outside the dividend paid. So does this represent a better way of doing things?