Meld Studios: Australia’s first company to become Employee-Owned by Trust

We have a new ownership structure!

After a year-long journey of working through existing Australian legislation, we’re excited to officially transition to being Employee-Owned by Trust. This is a huge milestone in Meld’s story, and in Australia’s company ownership story.

What does Employee Owned by Trust mean?

Technically, an Employee Owned Trust or EOT is: 

A trust established by a company to hold equity on behalf of its employees, with usually all – or at least a majority – of the shares being held by the trust. ~ Employee Ownership Australia

Practically, being an EOT means that:

• over time we transition shares from our three founders (owners) to the Meld EOT
• all permanent employees are beneficiaries of this Trust
• as a beneficiary, every Meldster has indirect ownership of Meld
• every Meldster wears two hats: practitioner and business owner
• every Meldster has a direct say in the direction of the company through established engagement structures
• every Meldster gets the benefit of equal profit distribution due to our collective efforts.

Why choose the EOT ownership structure?

For several years we had been exploring: 

• how to create a sustainable entity and culture that could continue to grow and serve, continuing to meet our mission
• how to create ‘skin in the game’ for all Meldsters
• a succession plan for our three founders and owners.

The key theme for us is longevity.

The EOT model appealed to us because:

• it is an equitable employee ownership structure
• the business ‘self-finances’ the purchasing arrangement by buying out founders (owners) over time 
• employees don’t need to buy in
• employees can also come and go without the need for ownership to change hands.

Through conversations with lawyers, accountants and business succession advisors we discovered that the EOT ownership structure was not easily supported by Australian legislation. We felt the need to change this! 

Influencing Australian legislation  

Serendipity connected us with Graeme Nuttall OBE, UK-based employee ownership expert, and Employee Ownership Australia (EOA), a not-for-profit body that advocates for all forms of employee ownership in Australia. 

Our shared desires to establish Employee Ownership by Trust as a viable ownership option in Australia lead to a year-long, weekly engagement of reviewing the UK’s EOT model and determining what might need to change in Australia’s tax and law regulatory environment to make this a viable option for business owners to take on.

EOA acknowledged Meld’s pioneering role in bringing the EOT model to Australia by awarding us Best SME Succession Plan 2020-21.

How is our business different now?

We have several new structures in place to ensure we:

• make collective decisions in the best interest of our company
• engage Meldsters in decision-making 
• distribute profit equally 
• buy out our founders over time.

These structures include:

• legal documents, including a Constitution, Trust Deed, and Founder Buyback Agreement 
• a Trust and Company board, with elected Employee Directors on each 
• an Employee Council, which we call the Meldster Forum
• six business functions, which we call Meldings, to drive and coordinate our shared effort to achieve Meld’s mission and business success.

Contact us if you’d like to learn more about our new company structure and operating model.

What’s next?

As one would expect from a design agency like ours, we’re using a design mindset and are approaching everything we do — our structure, roles and responsibilities, decision-making — as a live experiment. We are defining concepts, testing them out, and refining as we go. 

We will continue sharing our journey publicly because articulating it forces us to reflect and we hope this will be useful to other small to medium businesses looking at their succession planning, new ownership models, employee engagement and ways of working.

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Want to learn more?

Contact us if you’d like to learn more about our employee ownership journey, new company structure and operating model. You can also read Graeme Nuttall OBE’s Introduction to Employee Ownership Trusts (EOT).

Acknowledgements  

We owe a big thank you to:

• Graeme Nuttall OBE, at Fieldfisher in the UK
• Alan Greig and Max Karklins at Employee Ownership Australia
• Andrew Clements at King & Wood Mallesons in Australia
• Arup leaders and employees from around the world, who spoke to us about their long-standing experience as an EOT  
• Meld co-founders Janna DeVylder, Steve Baty and Iain Barker for driving this equitable ownership structure 
• All Meldsters for embracing new mindsets and responsibilities.