Steward ownership is a different way of doing business. Here, the mission and long-term goals of a company are the most important, not maximizing profit for shareholders. This form has two key principles:
Steward ownership Advantages :
Steward ownership Disadvantages:
Although steward ownership has many advantages, there are also disadvantages. One major drawback is that the legal structure is complicated. This can lead to higher costs and more administration for the company. It can also be harder to attract investors because profit maximization is not the main goal. This can make it more difficult to obtain capital. For founders and early investors, there are fewer opportunities to sell their shares. Conflicts can also arise between the company's mission and financial expectations. The success of the company heavily depends on the quality and integrity of the stewards who make decisions. If they do not perform well, it can pose a risk to the company.
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Patagonia, the well-known outdoor clothing brand, took a major step towards steward ownership in 2022. Founder Yvon Chouinard transferred the entire company to two new entities: the Patagonia Purpose Trust, which holds 2% of the shares and all the voting rights, and the Holdfast Collective, which holds 98% of the shares and economic rights. This setup ensures that Patagonia's mission and values remain central. Profits that are not reinvested in the company (approximately $100 million per year) go towards fighting climate change. With this change, Patagonia demonstrates how companies can use their ownership structure to support long-term goals and social impact without losing economic viability.
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