Before transitioning to an Employee Ownership Trust (EOT), Taproot was owned first by 7 employee-owners and then up to 30 employee-owners prior to the transaction. Over time, the company ran into succession challenges as share values had risen to a point that made it difficult for new employees to buy in.
The EOT offered a compelling solution that achieved the company’s desire for expanded employee ownership while minimizing the administrative burden that came with traditional share certificates.
A Purpose-Driven Organization
Taproot Community Support Services has been a cornerstone in delivering culturally responsive social services across Canada since its founding in 1983. Initially focused on adult corrections and youth justice, Taproot expanded to include disability programs, youth services, and family support. Today, with over 125 programs in various locations across British Columbia, Alberta, and Ontario, Taproot is dedicated to making a positive impact through compassionate, high-quality support. In 2025, the organization rebranded as Taproot and became the first social services agency in Canada to adopt an Employee Ownership Trust (EOT) model, a move that reflects its commitment to sustainability, inclusivity, and employee empowerment.
Why Taproot Chose the EOT Model
Before transitioning to an EOT, Taproot was employee-owned with about 30 employee-owners (fewer than 5% of staff). Over time, succession challenges emerged. Share prices had risen significantly due to property value increases, making it difficult for new employees to buy in. Despite attempts to split shares and encourage participation, interest remained low. The board explored alternatives such as management buyouts, private equity sales, and gifting shares, but each option posed risks…either threatening Taproot’s culture or creating administrative burdens.
The EOT model offered a compelling solution. Unlike traditional share-based ownership, EOTs simplify ownership by placing shares in a trust for the benefit of all employees. This approach eliminated barriers to entry, extended ownership to all 780 employees, and preserved Taproot’s mission-driven culture. “We didn’t want to risk another entity coming in and switching things up too much,” CEO Mike Fotheringham explained. “The permanence and longevity of the EOT resonated with our shareholders.”
Aligning Structure with Vision and Culture
For Taproot, the transition wasn’t just about solving succession; it was about aligning business structure with organizational values. Employees in the social services sector often face demanding work and modest pay. Giving them ownership was a powerful way to recognize their contributions and foster pride. As Mike shared, one employee remarked during the launch, “This is the first thing I’ve ever owned in Canada.” That moment underscored the human impact of the decision.
Maintaining Taproot’s collaborative culture was paramount. The EOT model supports this by embedding shared responsibility without disrupting operational leadership. Trustees represent employees, while management continues to steer day-to-day operations. This balance ensures that Taproot’s vision…providing compassionate, community-based support…remains intact while empowering employees with a stake in the organization’s success.
The Transition Process
Taproot’s journey to EOT began with education. The leadership team engaged Rewrite Capital for a feasibility study and hosted presentations to demystify the model for shareholders and staff. Once consensus was reached, Taproot refinanced its properties to fund the buyout of all existing shareholders, a rare achievement that allowed for a clean transition. Legal and governance frameworks were established, and a design committee of employees helped shape the trust’s structure.
Communication was key. Taproot launched the EOT with an all-employee call and even had Canada’s Finance Minister attend the announcement, signaling the significance of the milestone. Swag items like stickers and T-shirts reinforced the sense of pride and ownership among staff.
Why It Worked
The EOT model succeeded for Taproot because it addressed multiple priorities: succession planning, cultural preservation, and inclusivity. It avoided the pitfalls of external sales or complex share distribution, offering a streamlined, permanent solution that benefits every employee. Early signs are promising; Taproot has seen increased interest in job postings and a stronger sense of pride among staff. While retention and productivity metrics will take time to measure, the cultural impact is already evident.
Lessons for Other Businesses
Mike offers three key pieces of advice for organizations considering EOT:
- Foster a culture of transparency before the transition.
- Plan governance carefully, clarifying roles for trustees, boards, and management.
- Do your homework…seek objective advisors and learn from those who’ve gone through the process.
Ultimately, Taproot’s story illustrates that aligning ownership with purpose can create lasting value for employees and the organization alike. As Mike puts it, “With the EOT, you’re giving your employees an amazing legacy…distributed ownership…and that can be really rewarding.”
