Exploring Steward Ownership

A dive into steward ownership

In this article, Adrian Hensen from the Purpose Foundation states that the standard ownership model typically grants both power and profits to the owner. However, this setup can lead to situations where the sale of a company results in loss of employment for employees. Steward ownership addresses this issue by separating power and profit, emphasizing self-determination and purpose orientation.

Self-determination empowers individuals directly involved in the company's operations and mission. Purpose orientation dictates that profits are reinvested in the company in order to cover capital costs, or be donated rather than used for personal gain. Companies such as Novo Nordisk and Lundbeck in Denmark exemplify steward ownership. Patagonia, based in the US, transitioned to steward ownership in late 2022.

Photo by Tara Scahill on Unsplash

Hensen then distinguishes steward ownership and employee ownership. The difference lies in the potential for personal gain through the sale of the company in the latter. Nevertheless, both models prioritize empowering workers, be it through investing in employee ownership or creating employment security in steward ownership. Ownership approaches vary according to individual plans and circumstances, to make the best decision owners should be aware of all ownership options.

Go Deeper:

• Read the original article on Pioneer’s Post

• Read my article on exploring three employee ownership options

• Check out Tiffany Vargas’s article on Jefferson and Madison on employee ownership