Scott Bader – Employee Owned and Led
Scott Bader is a chemical company formed in 1921, by Earnest Bader and his wife Dora Scott. The business did well, and so it was unusual when, in 1951, Bader and Scott gave it away- to its own employees. We learn how the values of a Quaker couple a century ago are preparing this chemical company for the century ahead.
“The company was given away by the founders into trust for the benefit of the employees,” explains Kevin Matthews, CEO of Scott Bader today. “It was a very early employee-owned company. John Lewis is the most commonly known one, but Scott Bader formed around the same time.”
A Company of Colleagues
Scott Bader manufactures resins, gel coats, adhesives, and polymers to a range of industries including wind energy, materials for the light-weighting of automotive transport, the marine and also remediation coatings for piping, Scott Bader products have a broad application area.
By any measure, it is a successful business but run very differently to more traditionally owned companies.
“It is different,” Matthews acknowledges. “You don’t have external shareholders. What you do have is a very significant voice from the employees. We very much have that in our organisation. One of the core principles we like to operate on is industrial democracy. We get a lot of input in decision making from the employee groups, and they have significant representation on the main boards.”
Scott Bader’s operating board is composed of three executive directors, three independent non-executive directors and three employee-nominated directors. There is also a members’ assembly, a democratically elected representative body representing all of Scott Bader’s employees around the world. There is one representative for approximately every 50 employees. They discuss strategic questions as a body. This leads to a unique relationship between Matthews as CEO, and the staff at every level of the company.
“We refer to our employees as colleagues, out of the recognition that they are our owners and employees,” Matthews says. “They are simultaneously my boss and the people who work for me. So ‘Colleagues’ is the simplest way to say it.”
Once those colleagues are part of the company, they tend to stay.
“We tend to retain people for a long time once they join Scott Bader,” Matthews points out. “We have a policy of paying salaries that benchmark against the median in the marketplace and above market bonuses and we also pay a group staff bonus. That is a dividend, the same amount to everyone in the organisation, so those who are paid less do better out of that than those who are paid more. It is an attractive package including benefits, good retention of individuals, and active training regimes to really empower our colleagues to develop and grow within the company.”
Marking the Century
Of course, with Scott Bader being founded in 1921, this is a very special year for the company. It is a time not just for celebration, but reflection about what direction the company will be taking from now on.
“We’re marking our centenary in a few ways,” Matthews tells us. “We recognised four or five years ago the move that needed to be made globally in terms of sustainability and created our 2036 Vision. It is consistent with our founding principles. Our founders were Quakers, and ‘Do no harm’ was a core part of that thinking, an endorsement of that principle. Our centenary has been about building on that theme.”
Scott Bader is now in the process of publishing its first employee, environment, social and governance (EESG) report.
“We have been following our founding principals in a sort of ad hoc way for 70 years, but now we’re putting that into an official agenda going forward,” Matthews says.
Those principles are visible in every aspect of the business. Scott Bader has a charitable arm and donates 5% of its profits to charity. This year that will increase to 7.5% of its profits.
“I think one of the key elements of this company is recognising that as a business we operate in society and we need to be a business focused on our impact on society and the environment combined,” Matthews says. “We need to make it a positive impact above and beyond sustainability. These values are institutionalised in the constitution of the company and demonstrated across multiple arenas in terms of environmental sustainability, having a positive impact on society and treating people fairly, with respect and with equality.”
Matthews does not want us to take his word for it, however.
“One of the things we’re increasingly looking to do is find external standards to hold ourselves to account and measure how we perform against other businesses,” he says. “You need to look at yourselves from the outside to get a true comparison.”
A Global Business
As well as codifying Scott Bader’s principles, the company is also looking to take them further afield.
“Our historical roots are in the UK but we also have two plants in Europe in France and Croatia, another in South Africa, one in Dubai in the Middle East and a manufacturing plant in Canada, as well as sales offices around the world,” Matthews says. “We truly are a global business and that’s part of our future journey. We are asking how we will continue to position ourselves on that global scene, recognising that industries are global in nature. If you are supplying in the UK and Europe, you also need to supply in North America and China.”
Having celebrated 100 years of Scott Bader, the company is now looking to the next hundred.
“How do we play a significant role in the sustainability journey?” Matthews asks. “We’re supplying products into wind energy, light-weighting vehicles, water pipes – maintaining and improving their performance so they don’t leak. We have flame retardant systems for trains, for instance. We have a lot of products moving into that sustainable industry sector.”
While a lot of Scott Bader’s products are still based on conventional hydrocarbon supply chains, the company is increasing its R&D spend, looking at biomaterials, and bringing its own carbon footprint down.
“We have a net-zero target for 2028 with a target of 2036 for a positive environmental impact,” Matthews says. “It’s a significant aspirational goal and we’re already increasing our spending in R&D to do that. We have already won an award for a carbon fibre bumper that functions as a metal bumper. We are recognising society’s changing and changing in our direction – towards concepts of fairness and treating people with respect regardless of gender, race, religion. We’re focusing on how we embody that in our unique organisation.”