In today's rapidly evolving business landscape, the traditional models of company ownership are being challenged. As we strive to build a more sustainable and equitable future, pioneering entrepreneurs are exploring innovative ways to structure their businesses.
This shift is perfectly encapsulated in the book 'The Regenerative Enterprise', a comprehensive guide that offers a visionary and practical pathway for building future-fit organisations.
One of the key aspects of this regenerative approach is the reimagining of company ownership structures. Here are some of the innovative models companies are adopting:
1. Perpetual Purpose Trust (PPT)
A trust that possesses the majority of a company's voting shares to support a specific mission. In a PPT, corporate governance is highly flexible, but trust stewards ensure that all corporate activities align with the stated purpose in perpetuity. Patagonia employs the PPT structure.
2. Benefit Corporation
This unique form of incorporation enables directors and managers to balance the pursuit of public benefit alongside shareholder value. Illustrative examples of this model include Dr. Bronner’s. By transitioning into Benefit Corporations, the company has legally integrated its dedication to social and environmental performance, accountability, and transparency into its corporate framework.
3. Producer, Consumer, Shared Services, or Multi-Stakeholder Cooperative
This enterprise is owned and democratically managed by its members, following a one-member, one-vote principle. Members can be individuals (e.g., a consumer cooperative) or entities (e.g., farms, businesses, or nonprofits). Organic Valley, a cooperative of organic farmers, and Blackstar Coop, a worker-owned film production company, exemplify thriving cooperatives.
4. Employee Stock Ownership Plan (ESOP)
This benefit account trust structure possesses all or part of a company’s stock on behalf of employees. Shares are allocated to a wide range of employees individually, at no cost, over time, and employees receive payment upon leaving the company. Successful ESOP includes Amsted, an industrial components manufacturer.
5. Community Interest Company (CIC)
Exclusive to the UK, this corporate structure guarantees that a business pursues its mission perpetually by specifying a community purpose, safeguarding against sales, and capping financial returns to owners and lenders. City to Sea, an anti-plastic pollution campaigner, and Mydex, a social enterprise offering personal data services, serve as notable instances of CICs.
6. Foundation-Owned Company
In this arrangement, a foundation owns a business, either partially or entirely, usually following a transfer of ownership by the company’s founder. Well-known examples include Newman’s Own, a food and beverage company established by actor Paul Newman, and Novo Nordisk, a global healthcare company. By transferring ownership to a foundation, these companies ensure that their earnings are allocated to charitable causes.
7. Low-Profit Limited Liability Company (L3C)
Established in the late 2000s at the US state level, this corporate form complies with IRS requirements for program-related investments (PRI) by foundations, which are legally obliged to prioritise charitable mission and social impact over profits. Verde, a landscaping company emphasising sustainable solutions, serves as an L3C example.
8. Employee Ownership Trust (EOT)
This variant of Perpetual Purpose Trust holds the majority of a company's voting shares on behalf of employees, incorporating a profit-sharing mechanism and aspects of worker governance. Patagonia exemplifies successful EOTs. By embracing this model, the company has not only democratised ownership but also fostered a more engaged and motivated workforce.
9. Golden Share
This structure allows a mission-driven enterprise to pursue its mission indefinitely by granting a special share to an individual or entity (e.g., a foundation), which holds veto power over decisions that could compromise the company’s mission, such as a sale. Tony’s Chocolonely, a chocolate company dedicated to eradicating slavery in the chocolate industry, and Sharetribe, a platform for creating marketplaces, utilise the Golden Share structure.
10. Worker Cooperative
In this type of cooperative enterprise, the company's workers constitute the membership, owning and governing the enterprise according to a one-worker, one-vote principle. Cooperative Home Care Associates, a home care provider, Drivers Cooperative, a taxi service, and Equal Exchange, a fair trade food company, represent successful worker cooperatives.
11. ESOPerative
Also referred to as Democratic ESOPs, these are ESOP-owned companies that operate democratically, involving each employee in the company’s governance. Examples of ESOPeratives, such as Once Again Nut Butter and Carris Reels, prove that shared ownership and democratic governance can pave the way to business success.
Each of these models offers a unique approach to company ownership, prioritising the well-being of the community, employees, and the environment alongside profit. They represent a shift from the traditional shareholder-centric model to a more stakeholder-centric approach, where the success of the business is measured not just by financial returns but also by its positive impact on society and the environment. An approach that fully aligns with the Compass for Regenerative Business principles.
To learn more, we invite you to grab a copy of 'The Regenerative Enterprise', an invaluable resource for entrepreneurs looking to build businesses that are not just sustainable but regenerative. It provides a clear and actionable journey for businesses to move from a sustainable to a regenerative and equitable mindset. By learning from the book's countless examples of life’s 3.8 billion years of R&D, indigenous values, and companies leading the way, you can be part of the ReGeneration, leading transformational change and unleashing the power of co-creation and radical collaboration.
To learn more about ownership, we recommend the Transform Finance report entitled 'ALTERNATIVE OWNERSHIP ENTERPRISES: An Introduction for Mission-Oriented Investors' with a preface by Kate Raworth.
