EOTs: The Untold Truth About Employee Ownership Trusts — Why Some Inspire… and Others Fall Flat

Employee Ownership Trusts (EOTs) have grown rapidly in popularity since they were introduced in 2014.
For many founders, they appear to offer a clean, values-aligned exit route — protecting staff, preserving culture and avoiding the disruption of a trade sale.

But behind the headlines lies a more complicated reality.

In my work advising founders on succession, and through recent conversations with both an employee experiencing an EOT from the inside and an accountant specialising in EOT transitions, one insight became undeniable:

The legal structure is only half the story.
The cultural transition is where EOTs succeed or fail.

This blog explores what really happens when a business becomes employee-owned — the inspiring parts, the uncomfortable truths, and what founders need to prepare for long before they sign the paperwork.

A Real Employee Perspective: “I felt… indifferent.”

To understand the human side, I interviewed an employee whose company moved to an EOT 18 months ago.
(Details are fully anonymised to protect privacy.)

Here’s what he described:

• The announcement arrived by email only — no meeting, no conversation.

• Leadership didn’t explain the rationale or vision behind the change.

• Colleagues weren’t encouraged to ask questions.

• He didn’t really understand what “beneficiary” meant.

• No visible cultural change followed the transition.

• The employee trustee left shortly after and wasn’t replaced.

His reaction?

“I thought I might get dividends one day… but otherwise I felt indifferent.”

No new sense of ownership.
No increased engagement.
No shift in pride or loyalty.

The legal structure changed — but nothing about the culture did.
And this is one of the least-discussed truths about EOTs:
Employees do not automatically feel ownership simply because ownership has changed on paper.

The Expert View: Culture Determines Everything

To balance the employee experience, I spoke with Chris Maslin, founder of Go EO Ltd, who sold his own company to an EOT in 2021 and now specialises exclusively in helping SMEs through the process.

Chris’s perspective cut through many misconceptions.

1. Founders often misunderstand the economics

“Some think they can set their price, walk away with a ton of cash, and it won’t matter what happens afterwards. It doesn’t work like that.”

He emphasises that:

Payouts take 4–10 years and rely entirely on the company’s future success.

2. CGT changes will filter motivations, not kill EOTs

With relief dropping from 100% to 50%:

• founders motivated primarily by tax may rethink

• founders driven by legacy, culture and fairness will continue regardless

3. Small teams can thrive — if trust exists

“In smaller businesses, everyone knows each other. That sense of being ‘in it together’ can make EOTs work brilliantly.”

But if trust in leadership is already fragile?
The EOT won’t fix it — it exposes it.

4. Communication is the most common failure point

Chris warns:

“Overselling it creates mistrust. Suggesting the company is ‘gifted’ when it’s actually being sold… or implying employees own something they can cash in. Expectations must be realistic.”

5. Employees don’t understand EOTs immediately

“It takes time for staff to grasp what it means. Trust determines whether they give you the benefit of the doubt.”

This echoed the employee’s experience almost exactly.

6. Founder role clarity is essential

Chris’s advice is blunt and honest:

“Define your role post-sale. Don’t just say you’ll ‘do whatever is needed’. It confuses staff.”

Founder identity work is a critical part of EOT success.

So Why Do Some EOTs Fail to Inspire?

The unspoken truth is this:

EOTs don’t create trust.
They reveal the trust that already exists.

When a company with strong culture, aligned leadership and open communication transitions to an EOT, employees often feel:

• empowered

• proud

• secure

• energised about the future

When a company with low trust or weak communication transitions, employees may feel:

• indifferent

• confused

• suspicious

• disengaged

The difference isn’t the EOT.
The difference is the culture that precedes it.

The Human Transition Matters More Than the Legal One

Most articles about EOTs focus on:

• tax

• valuation

• governance

• structure

Important — but incomplete.

What gets less attention is the emotional, relational and leadership work required before and after the transition:

• preparing employees

• setting expectations

• defining leadership roles

• embedding governance

• strengthening trust

• supporting the founder’s identity shift

• building capability across the business

• managing communication thoughtfully

This is where the real work happens — and where EOTs either flourish or fade quietly into the background.

If You’re a Founder, Ask Yourself…

• Do my employees trust me?

• Does my leadership team work well together?

• Have I communicated the why, not just the what?

• Have I defined my role post-sale?

• Are we culturally ready for shared stewardship?

• Do employees understand what “ownership” actually means?

• Am I being honest about financial expectations?

If any of these answers give you pause, you’re not alone.
Most founders considering an EOT are strong on structure and strategy, but unprepared for the human transition.

The good news?
This part can be built — deliberately, intentionally and with the right support.

Final Thoughts: The EOT Is the Framework. You Bring the Meaning.

Employee ownership has enormous potential.
It can build stronger companies, more resilient cultures and powerful long-term succession.

But structure alone doesn’t create engagement.
People do.
Leaders do.
Communication does.
Culture does.

The legal shift is only the beginning.

What happens next — the human transition — is what determines whether an EOT becomes a source of pride…

…or just a line in a contract employees never think about again.