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Becoming a board member of the Ethical Property Company

On Saturday, I travelled to Bristol for the AGM of the shareholders of the Ethical Property Company (EPC).  At the end of that meeting, the shareholders voted to add me as a Non-Executive Director of the Board. Unfortunately, I had to run off right after the meeting.  I was unable to have a drink with my new colleagues on the board and those shareholders who were good (foolish?) enough to vote for me.

Nevertheless, I took my train seat with a big smile on my face.  I felt privileged to have been invited to join the board of this remarkable company.  Jamie Hartzell, the CEO, aided by Sam Clarke as Chair and the rest of the board have built a truly unique firm – one that sets the pace for the UK ethical and social business sector.

At face value, EPC is just a landlord (what could possibly be ethical about that?!).  But, atypically, EPC restricts its prospective tenants to UK social change organizations.  Moreover, it offers these organizations discounts of 20% to 33% off market rents.  In addition, to adhere to its own stringent environmental criteria, the company makes investments in its buildings that will reduce its carbon footprint, even if these investments may not maximize its ROI.  Finally, to top it all off, shareholders know all this and yet still buy the shares.

Over time, they have been reasonably well rewarded with the shares rising from £1 to 1.25 since the first share issue in December 1999.  In addition, they have received dividend income.  Yet what makes this firm so delightfully bizarre is that the shareholders, many of whom I met in Bristol, knowingly forsake some of the financial upside that could come from investing in a property share in exchange for the social, ethical and environmental (SEE) returns that EPC generates.  In fact, if their passion in the session or the workshops was anything to judge by, their interest in the SEE returns is far greater than in the financial returns.  Mark my words, this investor segment will grow in years to come.