As long as there is no specific legal form for steward-ownership, small and medium-sized enterprises as well as start-ups, in particular, need an alternative to the existing foundation models that enables them to implement steward-ownership. Current models are often too complex, costly, and difficult to implement. Establishing and managing foundations usually requires significant administrative and financial effort, which can be an insurmountable hurdle for smaller companies and start-ups. The Purpose Foundation offers a solution through the Veto-Share model, where a so-called control shareholder, such as the Purpose Foundation, oversees and secures the principles of steward-ownership. It is not necessary to establish an independent legal foundation for this.
The Purpose Foundation
The non-profit Purpose Foundation, based in Basel, and its 100% subsidiary, the Purpose Stiftung gGmbH, based in Hamburg, are particularly committed to the field of science and education on the topic of steward-ownership. In addition, the Veto-Share solution was developed to simplify the implementation of steward-ownership for companies. The Purpose Foundation holds veto shares of companies worldwide, while the Purpose Stiftung gGmbH is responsible for companies based in Germany.
How does the Governance of the Purpose Foundation work?
The governing bodies of the Purpose Foundation are the Foundation Board and the Entrepreneurs’ Council.
The Foundation Board is the executive board of the foundation, manages the business of the Purpose Foundation, and represents it externally. The Foundation Board currently consists of three people: Armin Steuernagel, Anna Bonan, and Daniel Häni.
The Entrepreneurs’ Council consists of elected representatives of the entrepreneurs in which the foundation holds veto shares. The Company Board is the counterpart to the Foundation Board. Without its consent, the principles of steward-ownership, as defined in the articles of association, cannot be specified or changed. Additionally, the Entrepreneurs’ Council must approve the (re)elections to the Foundation Board, so the companies themselves have influence over the board of the foundation. Moreover, the foundation’s articles of association can only be amended with the consent of the Entrepreneurs’ Council.
Who owns the Purpose Foundation?
Since the Purpose Foundation plays an important role in ensuring steward-ownership, the question often arises as to who owns the Purpose Foundation.
Essentially, the Purpose Foundation itself must be structured as a steward-owned company if it is to enable companies to implement steward-ownership.
Specifically, it works like this: The Purpose Foundation in Switzerland, like all legally capable foundations in Germany, is a legal entity that has no external owners. By definition, it owns itself. This is the advantage of a legally capable foundation: it is the only legal construct that owns itself. A legally capable foundation has no shareholders who own the foundation. There are also no shareholders holding property rights in the foundation. A legally capable foundation is, in a property law sense, merely an asset that was donated by the founder to pursue a specific purpose in a legal form with a guarantee of perpetuity. The foundation’s board manages this asset and pursues the foundation’s purposes without being the owner and is controlled by the state foundation supervision. In this sense, the board of a foundation is also qualified as a steward-owner, as it holds the steering wheel of the foundation (bound to the purposes of the foundation and the foundation’s articles) without having rights to the foundation’s assets.
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COMPANIES WITH A VETO-SHARE
Held by the PURPOSE foundation