The Value of Steward Ownership
Steward ownership begins with the premise that corporations have a responsibility beyond generating profits to increase shareholder value. That at their core, companies can and should have a reason for being that is rooted in purpose and serves a broad range of stakeholders.
While the corporate ownership structure can vary across companies, all steward-ownership models share two key principles:
Principle 1:
Profits Serve Purpose
Profits are used as an engine to support a company’s mission. They are reinvested in the business, used to repay founders and capital providers, shared with stakeholders, and/or donated to charity. Profits are not an objective in themselves, but a means by which the purpose is furthered.
Principle 2:
Self-Governance
Control of the company can never be sold. Leadership decisions are kept with “stewards” – people who are actively engaged in or connected to the business and its mission. The business is not a commodity, but a living system of people working towards a shared purpose. (Purpose Foundation 2018 - Steward Ownership: Rethinking Ownership in the 21st Century).
In the simplest terms, a steward-owned company is not operated as a wealth-building engine for investors alone, who can sell the company at any time. Rather a steward-owned company is designed to stay independent with its purpose safeguarded by “stewards” of the company who shepherd the health and vitality of the business to benefit their stakeholders (such as employees, customers, vendors, community members, etc.).