Do Asset Locks Perpetuate Racist Models of Wealth Creation and Distribution?

This article is a summary of thoughts that have been pinging around in my head – there are holes and gaps and maybe this conversation needs to be reframed, but I thought I’d put it out there. By no means am I claiming that I have an answer or a solution, but I’m curious to see what you all think? Do you agree? Disagree? Is there another solution from another country that I’m missing?

The arguments made below can also be applied to other protected characteristics, but I’ve chosen to present this from race perspective because that’s what I identify with the most. These opinions are solely my own and do not represent the view of UnLtd.


So, have you heard of an asset lock? What about a mission lock? No. Me neither. Before I moved to London to start working in the social enterprise sector, these words were as unintelligible to me as they probably are to you.

An “asset lock” is a clause embedded into the articles of a company that ensures that the assets of a company or society can never be cashed in by or transferred to private individuals or other companies for their own advantage. An asset lock means that:

  • While the company or society is still trading it must use its assets for a specific community benefit and may not transfer them to any person or organisation that will use them differently
  • If the company or society is dissolved, any cash or other assets remaining after creditors have been paid may not be transferred to the members
  • Instead the assets must be transferred to another company or society that has a similar asset lock[1]

In England, there is even a legal structure, a community interest company (CIC), that has an asset lock and dividend cap built into its articles of association. While there seems to be no industry wide agreement that social enterprises must have asset locks, recent emergency funding pots have been limited to organizations that have asset locks built into their articles of association.

So what’s the problem with asset locks? Well the more time I spend in the sector, the more uncomfortable I become with asset locks. Asset locks perpetuate racist models of wealth creation and wealth distribution, and ultimately contribute to preserving current traditional white systems of power.

According to Forbes, the 10 richest people in the world in 2020 are worth $686.5 Billion USD. Of the 10 richest people in the world, 9 are either entrepreneurs or have inherited their wealth from family entrepreneurs (yes, the list includes 3 Walmart heirs). Why does this matter? Well, it essentially means that the 9/10 richest people in the world made their money through the sale or transfer of assets/shares from their own companies, which in no way in the least would have been possible if any of these company’s had asset locks.

Yes, I know none of these companies are social enterprises, and with the exploitative model required to reached billionaire status, none of them have a social purpose built into any of their company articles. However, this clearly evidences why wealth creation and wealth distribution through entrepreneurship, especially social entrepreneurship is severely limited by asset locks. I’m not making an argument for the unlimited creation and hoarding of wealth, but what I do want to do is to reinforce that for communities who face multiple oppressions, such as people of Black, Asian, or other Minority Ethnic (BAME) backgrounds, requiring asset locks compounds their inability to create and distribute wealth. Asset locks reinforce the consequences of centuries of colonisation, the forced intergenerational poverty, and the barriers to having living costs, let alone wealth.

The United Kingdom has a vast and often overlooked (in comparison to the U.S) history of slavery. Not only did British citizens own slaves in many of their colonies, slavery was also common place in the United Kingdom until the Slavery Abolition Act in 1833. There are thousands of white British families who grew rich on the slave trade, or from the sale of slave-produced sugar, in the 17th and 18th centuries.[2] When slavery was abolished, racism was abundant, and made it difficult for black and brown Brits to generate income, nevermind accumulate wealth. For example, during the race riots of 1919, 120 black workers were sacked in Liverpool after whites refused to work with them[3].Immigrants from the Windrush generation also faced discrimination in finding jobs, housing and a simple google search today tells you that BAME communities have harder times accessing consumer credit[4], and that BAME entrepreneurs have historically had a much harder time receiving finance from banks[5].

So why, after all of this, in the exceptional circumstance that a BAME social entrepreneur creates a profitable thriving business that also does good, do we tell them that they can’t benefit off of it? That they aren’t able to accumulate the assets or wealth that may increase their/their families or communities’ social mobility.

In the UK, ethnic minorities are much more likely to live in areas of deprivation than white people[6]  Children from Bangledeshi and Pakistani communities are 2.8 and 2.4 x more than white British people, respectively, to live in child poverty[7]. In addition, recent study found that Black and minority ethnic households in the UK are over twice as likely to live in poverty as their white counterparts, leaving them disproportionately exposed to job losses and pay cuts caused by the coronavirus pandemic, an independent study has revealed.

So again, why after all of this, do we expect and sometimes mandate BAME social entrepreneurs have asset locks in place? 

Asset locks help to perpetuate the racial discrimination and biases in our economic system. They are inhibiting economic justice by telling BAME entrepreneurs that they aren’t able to keep or endow the wealth that they create. Because asset locks also dissuade traditional equity investors from supporting businesses, they also prevent money at scale from going to social businesses that may want to grow. There is no question that money and wealth have influence, so inherently asset locks are also closing one pathway for BAME entrepreneurs to assume and influence positions of power (another thing that this historically much harder to do ethnic minorities)

Asset locks  are reinforcing an age old message we hear all the time, but this time they are also telling us that by no means can we contribute to personal economic justice and communal social justice – you cannot help yourself if you want to help others. This is again particularly problematic, as we know that leaders with lived experience are often the ones that are best placed to contribute to address the challenges that thousands of people face. I know asset locks were created with the best of intentions, but we need to take the time now to reflect, analyse and see if we can find a better way forward.[MJ1]  Legal structures shouldn’t prevent entrepreneurs, specifically BAME entrepreneurs, from accessing critical funding in the sector that sometimes are limited to asset locked organizations.

So, am I saying that an asset lock is what is preventing a BAME entrepreneur from becoming the next Ben and Jerry’s? No. Well, maybe. It’s the build up of small things like this that keep traditional power systems in place. It’s how we tackle the drudgery of it all, like these asset locks, that can eventually make a difference.



[3] Black 1919: Riots, Racism and Resistance in Imperial Britain (Postcolonialism Across the Disciplines





This article was originally published on LinkedIn by Mathu Jeyaloganathan

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