Steward-ownership
A business ownership structure designed to prioritize societal and environmental impact while maintaining financial sustainability, embedding purpose over profit into the company's legal framework and governance through mission-driven principles.
Dissociates economic rights from voting rights
Steward-ownership gives decision-making rights to founders and employees, while investors receive greater guarantees over dividends and other payouts.
Separates money from power and reinvests profits
Companies ensure that voting rights are passed on to stewards who are responsible for upholding the company's purpose. Profits are reinvested in the company, used to cover capital costs, or used for charitable purposes.
An alternative model for business ownership
Steward-ownership is an alternative ownership model designed to align a company’s structure with its mission and long-term purpose. Unlike traditional models of corporate ownership, where maximizing shareholder profit often drives decision-making, steward-ownership ensures that control remains in the hands of individuals committed to the organization’s mission, values, and stakeholders. This approach helps safeguard a company's purpose across generations, preventing it from being sold or exploited for short-term financial gains.
Profits serve purpose, not executives
The core principles of steward-ownership are self-governance and profits serving purpose. Self-governance means that voting rights and control of the company rest with stewards who are actively involved in the business and dedicated to its mission. These stewards might be founders, employees, or other individuals aligned with the company's values, rather than external investors. In this model, ownership and governance are separated from financial ownership to reduce the pressure for profit maximization at the expense of the company’s purpose.
The second principle, profits serving purpose, ensures that profits are reinvested into the company or distributed to fulfill its mission, rather than being primarily extracted for private wealth accumulation. In many steward-owned companies, profits may be shared with employees, used to fund growth, or directed toward social and environmental initiatives. After a reasonable return for investors is achieved, the majority of excess profit is dedicated to the company's broader goals.
Leading by example
Well known companies adopting steward-ownership include companies like Bosch, Carl Zeiss, and Patagonia. These businesses have adopted structures that prioritize long-term sustainability and societal impact over short-term profit. By embracing steward-ownership, organizations can better balance the needs of employees, communities, and the environment while maintaining their independence and integrity.
