Rethinking Ownership: Steward-ownership in Germany
On October 30th – 31st 2018, the Purpose Foundation and Purpose gGmbH were co-organizers of the Steward-Ownership Conference 2018 in Berlin, Germany, along with the companies GLS Bank and bio verlag. These companies are members of UnternehmensGrün, the German founding member of Ecopreneur.eu. Steward-ownership refers to forms of responsible management in purpose-driven companies such as B-Corps and many members of Ecopreneur.eu. The question of succession and ownership attracted 350 interested people. Although the attendants were mostly from small and medium enterprises, there were also many founders looking for ways to protect their values and mission as well as investors interested in steward-owned companies.
The program included contributions from Thomas Jorberg, CEO of GLS Bank, and Franz Fehrenbach, Chairman of the Supervisory Board and steward-owner of Bosch, who addressed the topic of ownership both from an entrepreneurial perspective as well as from a social perspective. The topic was explored deeper in a selection of learning journeys. Unternehmensgrün member Ecosia held a learning journey along with Jolocom on the topic “New Ownership in Tech and What it Means to Employees.” Ecosia founder Christian Kroll shared his experiences with the Purpose Foundation. When asked about the motives behind Ecosia’s transition to responsible ownership with the support of Purpose, Kroll explained, “We wanted to make sure that Ecosia couldn’t be sold and always remained committed to its mission. Now Ecosia can never be sold – and profits will never be extracted from the company.”
The Purpose Foundation ensures that a company’s profits always serve to benefit its purpose and mission. This is achieved by holding a one percent “veto-right” of the company’s voting rights. In addition, control over the company’s voting rights can only be held by active employees rather than remote investors or shareholders. Through the veto-share, the Purpose Foundation ensures that the principles of steward-ownership and the purpose of the company can never be changed.
A new legal form was presented on the second day of the conference for steward-owned companies. The accompanying German Policy Paper presents the fundamentals for ensuring that corporate succession does not have to inheritable or sold and that control over the company is not saleable, but rather exercised by trustees of the company who serve for a limited period. Furthermore, it proposes that profits should either be reinvested or donated after covering the cost of capital. It also proposes that companies should be able to transition to steward-ownership without any tax consequences. This new legal form makes steward-ownership possible and more accessible, thereby meeting the demand of a growing number of entrepreneurs and companies who want to become steward-owned.
Steward-ownership means that companies belong to themselves and that the increase in wealth is not privately owned. This requires personal responsibility and co-entrepreneurship, and governance and ownership structures must be reconsidered. Ownership and entrepreneurship are permanently linked and investors cannot control decisions, which makes investment in long-term decisions easier. Steward-ownership does not enable companies to maximize profits, but rather to act in the interests of customers, society, and employees.