World Bank Presentation

By Ronald J. Gilbert, President, ESOP Services, Inc.

Mr. Gilbert co-presented, with David Binns of the Beyster Institute, a paper on ESOPs in International Bank Privatization.  The presentation was made at the 6th Annual Conference of the World Bank, IMF, and Brookings Institution in a global series on financial markets and development entitled “The Future of State Owned Financial Institutions.”  Lessons were distilled from prior successful and unsuccessful privatizations that contained an employee ownership component.  ESOP Privatizations that can be successfully implemented using a credit mechanism was one of the specific focuses of the presentation, which was made on April 26th or 27th in Washington, D.C. ESOP Privatization Employee ownership has been used to facilitate privatization in a number of countries, including the United Kingdom, Poland, and the U.S.

The most notable success to date may be in Poland, which has approximately 1,000 employee-owned companies that were formerly state-owned enterprises.  Most of these enterprises are still operating profitably.  The provision in the Polish law adopted in the early 1990’s provided credit to mid-sized and smaller Polish firms that met certain criteria.  The success of employee ownership in Poland has been greatly facilitated through the work of the Polish Employee Ownership Association (UNIA).  For additional information, including statistical studies that have been done by the Polish Academy of Sciences on the privatized employee-owned companies, please contact our Scottsville, VA office.  You may also contact Jacek Lipinski, the President of UNIA at the following address:

Polish Employee Ownership Association
30 Jerozolimskie Street
Warsaw, Poland 00-024
Phone:  011-48-22-823-6850

Prior International Experience

In 2002, Mr. Gilbert participated in a project to study the feasibility of using employee ownership in South Africa as a catalyst for the privatization of state-owned enterprises.  The study was presented to South African government officials.  Mr. Gilbert, who has 25 years of ESOP experience, began his international work in 1987, assisting in the introduction to the U.K. Parliament of ESOP legislation that was adopted several years later.  In 1989, he began working in Poland.  He supervised the employee ownership privatization of several state-owned enterprises, assisted in the foundation of the Polish employee ownership association (UNIA), and assisted in the drafting of Polish legislation, enacted by the SEJM, that established a credit mechanism for mid-sized and small Polish state-owned enterprises to privatize and operate as employee-owned companies.

In 1990, Mr. Gilbert supervised a project studying the privatization of BMZ, a large Russian enterprise, and in 1991, supervised the privatization study for KGHM, the Polish copper mining consortium with approximately 40,000 employees.  In 1991 he assisted in the formation of the Russian Union of Peoples Enterprises “RUPE.”

Mr. Gilbert participated in the privatization of several Argentinean gas companies, which were privatized with an employee ownership component under Argentinean law.  He supervised numerous privatization projects in Lithuania, and from 1992 to 1997 ESOP Services maintained an affiliated office in Vilnius, Lithuania, operating under various World Bank contracts.  Mr. Gilbert has also supervised projects in Malaysia and Saudi Arabia.

For additional information on the status of international employee ownership, visit The National Center For Employee Ownership.