Steward-ownership

represents a viable, proven alternative to traditional ownership structures

What is steward-ownership?

Steward-ownership is an economic and legal approach to corporate governance. It ensures organizational self determination and protects a company’s mission, and independence for the long-term.

Key principles

Rather than beholden to the interests of external shareholders, steward-owned businesses are governed by people who are directly involved in operations or mission of the business. Profits are either reinvested in the company or donated to philanthropic causes aligned with the company’s mission, making them more resilient and competitive in the long-term.

Steward-owned companies cannot be bought, sold, or inherited, however they can be merged with other steward-owned companies. These principles are permanently enshrined in the legal structure of a company.

Why steward-ownership matters

Our conventional approach to corporate governance and investment incentivizes short-term profit maximization over social and environmental concerns as well as at times the long-term success of businesses themselves. In a system that treats companies as speculative goods and prioritizes profit above all else, the values of entrepreneurs and the interests of ancillary stakeholders (e.g., employees, customers, and community) are often left out of the decision-making process. Steward-ownership represents a historically grounded alternative to this approach. Steward owned companies exist to serve their mission, employees, and customers, viewing profits as a means to an end and not the end itself. 

Who are the stewards?

Steward are people who are directly connect to the operations or mission of a company. In most cases, steward-owners are the founders, company leaders, and industry experts. In some cases, active consumers may also be included among steward-owners.

Becoming steward-owned

Transitioning to steward-ownership from traditional ownership involves re-chartering and aligning the companies finances with a steward-owned legal form. There is no single official legal structure for steward-ownership. There are several methods that enable companies to integrate the principles into their corporate structure. Legal structures vary across jurisdictions and some are more suitable than others to specific business needs.

Choosing steward-ownership

Entrepreneurs and company leaders invested in their mission and committed to protecting it have found steward ownership a viable, permanent solution to financial and operational independence. 

Wäschbar, Germany’s first e-commerce platform for organic textile and sustainable consumer products, is an example of a successful company that turned to steward-ownership for a viable, long-term solution to succession and mission-protection. 

Impact on entrepreneurs, investors, employees, and consumers

Entrepreneurs

For entrepreneurs, steward-ownership provides a solution for maintaining long-term mission alignment and control over their business. For exiting founders, it provides a clear succession mechanism, and means that their business will not be sold to a company that will use it for profit-maximization, but will stay safely in the hands of those most capable of running it.

Investors

Steward-ownership offers investors an assurance that companies will stay true to their mission and impact, and keep a long-term perspective on the well-being of their investment. Steward-owned companies are also often seen to be less risky investments as their survival rates and flexibility stand out from normal businesses.

Employees

Employees of steward-owned companies work together for a purpose and not only for the wealth generation of the company’s owners. Employees also often participate in profit-sharing and decision making.

Consumers

Steward-owned companies aren’t incentivised to prioritize profit over the quality of their product. Consumers can trust that steward-owned companies are truly committed to their values.