Steward-ownership for companies
How ownership Can Protect the Mission
Companies under steward-ownership are organizations in which the mission remains central and not the maximization of profits. The people charged with managing the company are able to monitor the course of the business in the long term—without pressure from shareholders who may be primarily focused on returns. In the words of the We are stewards foundation, "With steward ownership you safeguard the mission of a company". Steward ownership can be a solid foundation for entrepreneurs and investors who want to have a positive impact, for this reason the term steward-ownership has become synonymous with impact-oriented entrepreneurship.
Steward-owned versus traditional companies
In a traditional company, shareholders have a lot of influence: they expect a return on their investments. For companies under steward-ownership however, Control does not lie with shareholders, but with the so-called stewards: people who are involved in the organization and are mainly responsible for monitoring the mission. Making a profit is allowed, but it is a means to an end and not an end in itself. Most of the profit is usually reinvested in the organization or used for social causes. In other words: profit serves the mission. The fact that this form of organization is on the rise has been signalled by ABN-Amro: More and more entrepreneurs want to do something good for the world around them. You can read more about the growing interest in steward ownership(in Dutch) here.
How does steward-ownership work in practice?
Companies under Steward-ownership work with a modified ownership structure, for example through a foundation or special shares. This ensures that:
- control cannot simply be sold
- the mission remains central
- profit-distributions are limited
A well-known example is Patagonia. Founder Yvon Chouinard (former mountaineer, environmentalist and "idealistic outsider who wants to reinvent capitalism") structured the company so that control lies with a trust and the profits largely go to the non-profit Holdfast Collective. This means, the mission—protecting the earth—remains structurally secured.
Here in the Netherlands: BuurtzorgT director Bas van Raap explains that Steward ownership in his organization offers the opportunity to do business with the speed of a BV and the soundness of a foundation. You read how here (in Dutch).
Why this model is relevant right now
Interest in impact-oriented entrepreneurship is also growing in the Netherlands. For example, Gijsbert Koren argues in the Volksrant (in Dutch) that the power of steward ownership lies mainly in letting go of profit maximization. This gives companies more room to make choices that are sustainable and socially responsible. In addition, he sees a company as a community of stakeholders: employees, customers, suppliers and investors. From this perspective, a company should act responsibly at the social and ecological level and not be primarily focussed on profit generation.
Governance and steward-ownership in the cultural sector?
Steward-owned companies demonstrate that entrepreneurship can be done differently: less focused on short-term profit, more on sustainable value and social impact. For organizations with a clear mission, such as many cultural institutions, this model offers an interesting alternative to traditional structures. Steward-ownership models explicitly safeguard the mission and ensure a clear separation between control and financial interest. At the same time, it requires careful choices. The structure of governance, control and fiscal position all determine whether the model works in practice.
From structure to strategy
Steward-owned companies show that entrepreneurship can also be less focused on short-term profit and geared more towards sustainable value and social impact. For organizations with a clear mission—such as many cultural institutions—this model offers an interesting alternative to traditional business structures.
Find out more
ABN-Amro recently published this article (in Dutch) in which steward-ownership is explained. Are you curious about the pioneers? Check out the website wearestewards.nl, you will not only find useful information there, but you can also register for lectures and workshops all about steward-ownership. You canalso listen to the positive impact podcast with Gijsbert Koren about future-oriented entrepreneurship with steward ownership. Are you considering the possibilities of steward-ownership as an organizational form for your company? Lupacompany-Prolupa supports organizations in making these considerations at the intersection of governance, taxation and strategy.