Private ownership of a company has positive and negative aspects. The positive aspect is that the owner feels responsible and has a strong connection to the company. This fosters entrepreneurial drive, long-term thinking and prudent investments. The negative aspect is that the company can be sold and end up being owned by investors who may dismantle it or deviate from its mission. It would then be managed by administrators who pursue private interests and don’t necessarily have the company’s future at heart. Steward-ownership is an economic and legal concept, which seeks to retain the positive aspects of private property while keeping the negative aspects in check.

In this article Armin Steuernagel describes the different solutions and types of steward-ownership:

A: Trust-Foundation-Model – example BOSCH

Trust-foundation models separate voting rights and dividend rights completely and place them in two separate entities. The dividend rights are held by a charitable foundation and the voting rights by a trust, which is managed by current managers who fulfill the role of trustees.

Example: BOSCH

Founded: 1886

Revenues 2016: € 73 billion

Profit 2016: ~ € 4 billion

Employees 2016: 390’000


In Short: Bosch is steered by the people who feel most connected to Bosch, who are currently the managers or were formerly Bosch managers. They do not have any right to participate in the company’s profits but only voting rights. When trustee-owners leave, the remaining trustees co-opt a new co-trustee. Co-option means that the trustees have the power to appoint new trustees – no external body has influence over them. The trustees decide what proportion of profits is reinvested and how much the shareholders with dividend rights (foundation and family) receive.


Since 1964 the Robert Bosch GmbH (equivalent to a private limited company) has had three shareholders:

1. the heirs of Robert Bosch (current Bosch family) (7% of voting rights, 8% of dividend rights),

2. the Robert Bosch Foundation (Stiftung) gGmbH (charitable foundation that donates to causes that Robert Bosch was particularly close to) has 92% of dividend rights and no voting rights.

3. the Robert Bosch Trust (Robert Bosch Industrietreuhand KG) owns 93% of voting rights but no dividend rights.

Information on the three shareholders and how governance works

1. The heirs of Robert Bosch do not have significant influence.

2. The Robert Bosch Foundation may receive dividends if the Robert Bosch Trust decides to pay dividends. Currently they receive around € 70 million a year (out of € 4 billion in profits).

3. The majority shareholder, the Robert Bosch Trust, controls the company (Robert Bosch GmbH) and has 10 trustee shareholders who do not have any dividend rights. Four of those shareholders are current and former Bosch C-level managers and six are business professionals who have known Bosch for a long time and bring an outside perspective (e.g. currently a former head of UBS Bank, the CEO of BASF and other people with a good reputation for business). Two of these ten shareholders are managing partners, but all shareholders have only one vote and decisions need to be taken unanimously if possible. If a trustee shareholder turns 72 he or she has to retire and a new person is coopted by the remaining shareholders. The Robert Bosch Trust controls Bosch directly and indirectly through selecting the members of the supervisory board of Bosch and selecting the board of directors (officially through the vote of the supervisory board). Because of German co- determination law („Mitbestimmung“) half of the 20 members of the supervisory board are elected representatives of Bosch employees.


The described structure was put in place 1964. The founder Robert Bosch led and owned the company until he died in 1942. He brought it to unseen success. When he started to think about who would succeed him none of his sons were old enough. However, he believed that one day one of his sons might potentially be able to lead the company. But since Bosch senior placed the mission and interest of the company first, he endowed a group of executors of his testament with the power to take the right decision based on his wishes if and when the time had come. He outlined in his testament three potential directions how ownership of Bosch could be structured in the future. One of those options was two find a foundation-trust solution. After the executors tried for ten years to educate and prepare Bosch junior, they finally decided it would be in the interest of Robert Bosch and in the long term interest of the company to find a different structure. The Bosch family received 8% which they still hold today and they got the face value of their shares in cash (paid by the Bosch foundation that would receive dividends in the future). The testament executors became to a large extend the trustees of the Robert Bosch Trust and saw themselves as the proper owners of Bosch. Even today they still see themselves as owners or trustee-owners, being responsible for the mission and survival of the Bosch company. Bosch’s structure has been operating successfully until today and many family owned companies have copied it in some form or another.

Some sources about Bosch: ownership-structure-and-organisation.php
2015, Johannes Bär and Paul Erker, „Bosch: The History of a Global Enterprise“, C.H. Beck


B. Veto-Share Modell (what I often recommend)

The veto share model works almost like the Trust-Foundation model with the only difference that no trust and foundation are needed. Voting rights and dividend rights are separated as well. Voting rights are however held directly by the trustee-owners (CEOs and managers), dividend rights are held within the company or by foundations and investors.

But because no outside foundation-statute ensures the long-term security of that structure, the structure is ensured by a golden-share which is held by a charitable foundation.


Similarly to the Bosch Trust statutes in this model the statutes of the company directly ensure that only the people leading the company can hold voting rights. If a trustee-owner (voting rights owner) leaves the company, she must transfer her control rights to a successor. Furthermore the statutes ensure that voting rights are not connected to dividend rights. These rules cannot be changed by voting right holders unless the holder of a golden share votes in favour of the change. This can be a 1% share. The Purpose Foundation in Switzerland provides the service of holding veto shares and executes the veto right according to the principles of self-ownership. A share of 1% is sufficient for the foundation to veto any changes that contradict those principles.

Example: Triaz Group (Waschbär)

Founded: 1987

Revenues 2016: ~ € 85 million

Profits 2016: ~ € 3,5 million

Employees 2016: 360


The Triaz GmbH has one shareholder: Artiz GmbH. The Artiz GmbH has three groups of shareholders:

1. the trustee-owners

2. the Purpose Foundation

3. Investors

1. Trustee owners: the first set of trustee-owners was selected by Ernst Schütz, the owner of the company. The trustee-owners have voting rights but no dividend rights. They can give themselves rules and procedures. In the case of Triaz the majority of the voting rights will be held by only one person, while others hold minority stakes. They cannot pay more than market-rate salaries to themselves. When the trustee owners leave the company or if they break with the mission, a „Succession Board“ may choose new trustee-owners for the company : The succession board consists of 4 people (experienced entrepreneurs and investors) from outside the company and 3-4 employees. The „outside-part“ of the succession board co-opts itself.

2. The Golden Share is held by the Purpose Foundation. The foundation cannot interfere in business decisions. It only ensures that those sections of the statutes that ensure self-ownership cannot be changed. The Foundation itself has a statute that obligates it to veto any such changes. This can only be overridden if the majority of companies that use the service of the Purpose Foundation vote for an override in the entrepreneurs-board of the foundation.

3. In the case of Triaz investors do not yet hold parts of the dividend rights. In the contrary – all dividend rights are held by the company itself. All profits are thus reinvested.


Triaz was founded by Leo Pröstler as Germany’s first organic textile and sustainable life-style mail order company. It went bankrupt in 2001 and Ernst Schütz rebuilt the company and grew it very successfully. He bought the company from the bank for around € 7 million. Ernst Schütz was looking to retire from the company. He did not want to leave it to his children, who he thinks should not be forced to continue his life but live their own life. Nor did he want to sell it to private investors because he wanted that the company stays mission driven and independent for the long term. That is why he chose the self-ownership structure. It makes sure that the new trustee-owners will not only be employed people but real voting-right owners, as in the case of Bosch.


C. One-Foundation Modell

Historically companies themselves could be foundations, thus a company could be a legal entity with a clear purpose but no owners. Today foundation companies are typically commercial entities, which are fully owned by a foundation. This leads to foundation board- members being ultimately in charge. In many cases this seems to work, as e.g. in the case of Zeiss.

Some foundations, like for example Europe’s largest drug-store chain DM Drogeriemarkt, which is also a one-foundation company, have two boards, one holds the control rights of the company, another holds the right to distribute the dividends to charitable causes.

Example: ZEISS

(The ZEISS Foundation owns two companies: ZEISS and SCHOTT.)

Founded: 1846

Revenues 2016: 6 billion

EBITDA 2015: € 840 million

Employees 2016: 39’000

Important: when Zeiss became self-/foundation-owned it had just about a thousand employees. Thus the biggest part of the growth happened under steward-ownership.


The foundation is a charitable foundation that donates profits or reinvests it. There is not one single outside shareholder who participates in the company’s profits, leading to a very stable equity base of the company and enormous resources for donations. The university of the company’s home town of Jena is largely financed by Zeiss.

The foundation board consists of former mangers and of two ministers of German „Bundesländer“. The board selects the managers of the companies. The link between company and foundation is not as direct as it is in the Bosch case.


At the end of the 19th century under the impression of the consequences of industrialisation, of the growing inequality and poor living and working conditions of the workers the debate about ownership of land and productive means moved many people in Germany. Marx argued for common ownership, pope Leo XIII underlined the importance of private property in 1891 and Bismarck tried to prevent a socialist revolution by introducing social insurance schemes. In this time Ernst Abbe, entrepreneur, pioneer, professor of physics, and co-owner of the very successful Carl Zeiss optics manufacturing company, invented a new type of ownership structure. It could be seen as a „third way“ on the question of ownership of productive means: he did not endorse unlimited private ownership of the means of production nor common ownership by everybody, but a self-ownership of the company by the juridical form of a foundation, that owns itself and operates the company.

Abbes Philosophy was influenced by his experiences as a son of worker who had to work 16 hours a day without breaks. Abbe himself became a professor of physics and at the university of Jena invented the technology that became the basis of Zeiss’s success. These early experiences probably contributed to his conviction that the value and the profits of the company Zeiss did not belong to him alone, but to the workers who co-produced the success and to the society (and university) that laid the ground for technological advancement. Although the legal system in his times (as well as today) would place the value and the profits with him as the owner, he argued that this would not correspond to the actual reality. A worker-cooperative or a shareholder company were no options for him, hence he decided to create the Carl Zeiss foundation in 1889 (after Carl Zeiss had died). The foundation ensures that the company cannot be sold and profits are either reinvested or donated to the common good. In 1896 he wrote the long and detailed statutes of the Zeiss foundation himself, which where a remarkable legal innovation and earned him a PhD in jurisprudence. In those statutes, Abbe laid down further important social rights of the workers, amongst them „Mitbestimmung“, health and pension insurance for the workers, 8 hours working day and others. He also laid down the principle that the highest salary of any ZEISS employee cannot be higher then 12 times the lowest salary a worker gets after being two years at ZEISS:

The pioneering ownership form and the very innovative idea of social responsibility influenced many other companies like for example Bosch. After WWII there was even a discussion amongst economists in Germany (first and foremost Alfred Weber) whether the Carl Zeiss ownership model could serve as an ownership model for post-war Germany.

Example: DM Drogeriemarkt

Dm Drogeriemarkt is one of many one-foundation companies that exist in Europe, but it is significant due to its size and dominant role in the German drug store market.

Founded: 1973

Revenues 2016: 9 billion

Profits 2016: ?

Employees 2016: 56’000

Important: Europe’s largest drug store chain with more than 3’300 stores.


Dm is directly owned by a foundation, similar to Zeiss (there is however one early investor who does not want to exit and is still an owner). Contrary to Zeiss, no government officials are involved in the dm foundation. The Foundation is controlled by current managers, former managers, lawyers and a few successful entrepreneurs who are trusted and respected by Götz Werner, the founder of dm.

The Foundation has two boards:

1. One operative-board that is in charge of executing the dm voting-rights, which are held by the foundation. The board co-opts new members without outside interference.

2. One charitable-board, which is in charge of distributing the profits that the foundation receives when the operative board decides that some proportion of profits does not need to be reinvested. The board also co-opts new members.


Götz Werner is one of the best known entrepreneurs in Germany. He has written several bestselling books and has been campaigning for the introduction of a universal basic income. In 2010 he decided to donate all his shares to the dm Foundation and thus make dm self-owned. He has spoken publicly about this step and has made it known that his children are totally happy with his decision. He has often said in interviews that even though he loves his children he thinks they should not just continue what he has built in his life but build their own lives instead. Furthermore he thinks only the most able persons should be leading dm, independent of blood-relations. His 7 children receive a very moderate universal basic income which he has endowed them with.

Example: Wala Heilmittel GmbH

The Wala Heilmittel company produces natural care products, natural cosmetics products and is one of the biggest and oldest producers of natural and homeopathic medicine

Founded: 1935

Revenues 2016: €125 million

Earnings before tax 2015: € 11,8 million

Employees 2016: 1’000


100% of shares, dividend rights and voting rights are owned by the Wala Stiftung, a non-charitable foundation that does not benefit any private person. It has the aim to further the mission of the Wala company. The board of the foundation coopts new members. According to the statues of the foundation primarily former managers and employees of the company should be selected. There are currently six Wala Foundation board members.


The founders of Wala decided to choose this model in order to ensure long term independence of the company. When self-ownership was instituted in 1986 Wala had only about 175 employees and made a turnoverer of around 17 million marks. Since then it has grown to over 1000 employees and a turnover of over 120 million Euros.


D. Two-Foundation Model

The two-foundation model often does not technically employ two foundations because in many cases two charitable associations or other legal entities are used. However, the general principle is that there is no real owner. Voting rights and dividend rights are separated. One entity, the charitable foundation, holds the dividend rights and other entity holds the voting rights. Both entities mostly coopt their controlling board members.

Example: Mahle

Mahle GmbH is in the automotive supply industry, every second car on earth was build with Mahle-products.

Founded: 1920

Revenues 2016: € 11,4 billion

EBITDA 2015: € 1,1 billion

Employees 2016: 76’000

Steward-owned since: 1964

Important: most of the growth took place in the time when Mahle was already self-owned. Alone in the last 10 years the revenue doubled.


Mahle GmbH has two shareholders:

1. The Mahle Foundation (Mahle Stiftung GmbH), which owns all dividend rights. It supports charitable projects in many fields.

2. The MABEG e.V., a association that holds all voting rights. Its members to not have any economic rights, they are not shareholders but just „members“ of the association. They coopt members when they see the need to do so.


The two brothers and founders of Mahle donated 1964 all their shares to the Mahle Foundation and the voting rights to the association. They did not receive any personal compensation for it.


E. Learnings

1.All self-owned companies separate voting rights from dividend rights in some way or another. Even when one foundation holds all rights, the board members of the foundation hold only the voting rights and no foundation board member holds any economic rights. The principle here is: people who are able and motivated by the mission should steer the company and not people who are following economic interests or financial incentives. This separation of voting rights and dividend rights goes against main stream economic theory. But behavioural economics, especially research on intrinsic motivation e.g. of Prof. Bruno S. Frey, proves that intrinsic motivation is stronger, more reliable and more sustainable in the long term.

2. All companies make sure that voting-rights holders are either current or former managers, thus people who really know what the company does and who feel connected to the cause. Thus they try to make sure that voting right ownership is connected to „entrepreneurship“.

3. All companies mentioned above have ensured that most of the profits are reinvested in the company and that only very limited amounts of money are extracted by outside shareholders. Even when foundations hold all dividend rights, they only receive a fraction of the profit. Bosch for example pays only € 70 million as dividends to its foundation, a fraction of the € 4 billion profit it makes every year. With these large sums companies are able to invest large amounts in research and development and continue to follow their missions for many years. Furthermore all companies limit the salaries of the top-management in some way.

These two major observations lead to the three main principles of trustee-ownership or self- ownership:

1. Voting rights and dividend rights are too be completely separated, making sure that economic interests and decision making does not interact. Dividend rights do not have voting rights.

2. Voting rights are in the hands of people who lead the company, either operatively or strategically.

3. Profits are means to an end and not an end in itself:

a. Profits are to a large part reinvested or donated.

b. Salaries are capped

Furthermore there are some other interesting observations:

4. All companies have instituted a structure of self-ownership in the early phase of their existence. This structure was created by founders, testament executors or current owners.

5. Looking at the history of companies that have been self-owned for a long time, it is clear that major growth has taken place after self-ownership was put in place.

6. Owners/Founders have either donated their shares or taken values well below the market price, in the case of Bosch even just the face value of the shares.

7. All current voting-right owners regard themselves as the true owners, or trustee-owners, although according to property rights theory, they are not really owners but only trustees. The voting rights ownership seems to produce such an identification with the company that lacking economic rights do not undermine the responsibility of voting rights owners.