Today we see many founders, entrepreneurs and owners who are looking to build companies that create positive social impact. They share the conviction that companies exist to serve their workers, customers and society and their mission extends beyond generating profits. They see profits as means to an end. For those entrepreneurs a company is not simply an asset, but a group of people working together for a purpose.
Put simply, steward-ownership means that the company is controlled by autonomous “steward-owners”, who have the best interest of the company at heart and are not incentivised to purely optimise financial performance.
Here we give a brief explanation of “steward-ownership” – an ownership and governance model which aligns the interests of entrepreneurs, workers, investors and society.
There are two principles at the heart of steward-ownership:
1. Entrepreneurship = Ownership Governance is executed by stakeholders directly involved in running the company or directly connected to it, rather than by investors or outside influences. These stewards take on entrepreneurial responsibility for the company‘s values, actions and legacy.
2. Profits Serve a Company‘s Purpose Profits are primarily reinvested or donated towards advancing the company‘s purpose. This is often achieved through a separation of dividend rights from governance rights to eliminate financial incentives and bolster purposeful, intrinsic motivation in the leadership. We refer to steward-ownership broadly as any legal and financial structure that fulfills these principles.
Steward-owned companies have been proving for decades that they are as profitable as companies with traditional ownership structures. Scientific studies show that they are also significantly more long-term oriented.
Employees get better pay, are more loyal to the company. Steward-owned companies strenghten a decentralized economy.
Today, more and more companies, especially in the organic and social sectors, are choosing alternative ownership structures to stay independent and mission driven for the long term.