Governance: Who has entrepreneurial control over the company?

 

Following the principle of self-determination, in steward-ownership-aligned financing, entrepreneurial power (control) over the company is not an asset one can buy. It is not distributed proportionally to capital put into the company – money does not equal power. Guided by the question “What form of stewardship will help this company thrive?”, control is being allocated based on the question “Who is best suited to steer the company?”, not based on the automatism of “Who is the highest bidder?”. 

This means that while investments in steward-ownership-aligned financing don’t automatically come with voting rights, investors play the role of key partners for the company, with specific rights tied to that role. They are viewed as enablers and can be involved in the governance in ways that extend beyond overtaking the control.

Investor involvement can be designed in various ways: through information rights, consultancy, co-determination and veto-rights on specific aspects, investor provision rights giving them a say in situations connected to the performance of their investment, or — depending on your steward-ownership model – even a minority of voting rights. The suitability of these rights depends on the role and involvement that the company and the investors envision and the relationship they want to build.

We will dive deeper into the different forms of governance in steward-ownership-aligned financing here.