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What is steward ownership?
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:
- Self-governance: The company's leadership is in the hands of people who are closely involved with the company, such as employees or founders. This voting right cannot be sold or transferred.
- Purpose-driven: Profit is a means to support the company's mission, not the goal itself. The profit is reinvested in the company, used to cover costs, or donated according to the company's mission.
Steward ownership Advantages :
- Mission and long-term goals are central, not profit maximization.
- Investors cannot determine the course
- Employees and stakeholders are more involved in decisions.
Steward ownership Disadvantages:
- Complex legal structure
- Limited exit opportunities
- Potentially lower financial returns
- Less flexibility in raising capital
What are the disadvantages of steward ownership?
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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Example of steward ownership?
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.
Why RoundE?
RoundE is your partner in employee participation plans. Instead of hiring expensive lawyers to set up your participation plan, we developed in-house software to streamline this process: saving you time and money
Quality
Our plans are checked by both tax and fiscal specialists. You also get a , so the contract fits your needs perfectly
Fair pricing
We besparen kosten door ons bedrijf online te runnen en het hele proces te automatiseren, waardoor we zeer concurrerende prijzen kunnen aanbieden.
Premium service
You can contact us at anytime and one of our legal experts will be ready to help you. With any purchase, you also get a free consult with one of our experts
