Leonardo Valettas, Panagiotis Christofis | Founders of STEWARDS
Interview given to Good Move Initiatives
“Our vision is an economy that serves first and foremost the people and the society while protecting and preserving the planet.”
-Please introduce us to Stewards. What is your main vision and what do you aspire to achieve?
The vision of Stewards is an economy that serves first and foremost the people and the society while protecting and preserving the planet.
Our mission is to assist the adoption of the steward-ownership model in Greece, a highly successful company structure and governance model, which promotes social innovation and purpose-driven entrepreneurship.
The steward ownership (or purpose ownership) model centers around two major tenets:
1) Self-determination: power over the company cannot be speculated with but is held by people directly connected to the company’s operation and mission. Hence investors in purpose-owned company don’t automatically get a seat at the table, which is very unusual in the business world. Furthermore, purpose-owned businesses cannot be sold to “conventional” profit-only seeking businesses. Usually a golden share (e.g. held by the Purpose Foundation) prevents the company from being sold to simply the highest bidder. Purpose-owned companies can only be bought (and sold) to other purpose-owned companies.
2) Purpose orientation: the purpose stands above everything in the company. Profits are means to a purpose, not a goal in itself. Equity investments into purpose-owned companies are usually not possible. Only via loans can investors invest in purpose owned businesses.
Stewards are working in partnership with Purpose Foundation, the biggest advocate of steward ownership in the world, and is being supported by Helidoni Foundation and The Hellenic Initiative.
-How does steward-ownership work in contrast to shareholder-primacy ownership? What are the differences and what is the level or risk involved in each model of governance?
Shareholder-primacy focuses on maximizing financial returns for shareholders, potentially leading to short-term decision-making and higher risk levels. In contrast, steward-ownership aims to create value for multiple stakeholders and prioritize long-term sustainability and societal impact, potentially reducing short-term risk, but at the same time requiring governance to align decision-making with broader goals.
The emphasis on maximizing shareholder value can lead to short-term decision-making and the interests of shareholders may not always align with those of other stakeholders, such as employees, customers, and the broader community. In pursuit of higher returns, companies adopting a shareholder-primacy model may engage in risky practices that prioritize short-term gains over long-term sustainability, employee welfare, and environmental or social responsibilities.
Steward ownership on the other hand encourages a more inclusive decision-making, involving a broader community of stakeholders compared to the more centralized process often seen in traditional shareholder-primacy companies. Steward-owned companies will not attract certain types of investors who are primarily interested in short-term financial returns, like VCs and PE firms
-The stewardship model has often been criticized for being unrealistic, oversimplified, reinforcing the egos of senior executives and lacking empirical evidence. How do you respond to this ?
It has been argued that the stewardship model oversimplifies the complexities of modern organizational dynamics, as it requires that executives always act in the best interests of the organization, putting aside their personal motivations, alongside stakeholder power struggles, and conflicts of interest.
We believe that while it seems simplified to some extent, it provides a useful framework for understanding leadership behaviour and encouraging executives to adopt a more selfless and long-term approach.
We argue that the model, when properly implemented, promotes a sense of collective responsibility and shared decision-making among leaders, cultivating a mindset of stewardship and accountability.
There is a lot of empirical evidence which proves that foundation-owned companies have 6x better chances to survive over a 40-year period than conventionally owned businesses. Moreover, a study comparing 300 Danish companies shows a higher economic performance of profitability and market value foundation companies compared to privately or dispersedly owned ones.
Studies have found that companies with a long-term orientation tend to outperform those with a short-term focus, as they are more likely to invest in research and development, engage in strategic planning, and build enduring relationships with stakeholders.
Finally, we are currently building a library of articles, publications and relative books and essays on the topic which will soon be published on our website.
Photo from latest steward ownership conference. Source: so22.org
-Please talk to us about a successful case study of stewardship governance model in the business world.
John Lewis Partnership (JLP), a company of 90,000+ employees and more than 11 billion pounds of annual sales revenue is structured as a purpose-owned trust, a model of democratic steward ownership that includes its over 90,000 employees in its corporate governance structure.
Through a sophisticated set of checks and balances, the Partnership ensures that the trust’s purpose and independence are secure for the long-term.
This trust structure has enabled the company to stay independent, principle-led, and dedicated to its commitment to foster the happiness of its employees. JLP is owned by a trust on behalf of all of its employees, or “partners.” The trust holds the shares for the benefit of the company’s employees. The trustee is the John Lewis Partnership Trust Limited. John Lewis also practises a blend of employee democracy and meritocracy: All partners have a say in how the company is run, and have a right to its profits.
Recently the viability and structure of JLP was questioned due to some unexpected low sales years - due to the pandemic. The structure proved itself resilient and is this structure that helped JLP to overcome all the challenges successfully.
For more successful case studies please visit: https://stewards.gr/case-studies/
You may also view other case studies in: https://purpose-economy.org/en/companies/
Photo from latest steward ownership conference. Source: so22.org
-How is the stewardship model doing in Greece? Do you think that there is potential growth for this type of governance and why? What are the main challenges in your view?
Stewards are closely working with Ten Million Hands, the first Greek entity incorporated adopting the steward-owned principles. TMH is creating the biggest information hub in Greece to raise awareness and educate consumers and brands on how to adopt sustainable practices. TMH is also working closely with TÜV Austria to introduce a certification which will accredit all aligned brands and producers.
Besides TMH, Stewards are in talks with many other organizations that explore the adoption of the stewardship model ranging from startups, nonprofit organizations, and sophisticated investors and grantors who want to maximize the impact of their investments and grants.
Stewards have a 3-year plan to support the first Greek case studies of steward-owned businesses and attract aligned capital to support the steward-owned ecosystem. We truly believe that there is fertile ground for growing steward-ownership in Greece.
There are four distinct types of organizations where steward ownership is able to provide meaningful solutions:
i) Startups to better attract and retain talent while securing their long-term vision and purpose
ii) Mature businesses to successfully implement a succession plan and continue their owners’ legacy
iii) Non-profit organisations to establish financial autonomy without compromising their non-profit status
iv) Grantors, Foundations, and Investors aiming to ensure that their investment / grants are used towards the long-term purpose of the organization
Our main challenge is the lack of knowledge for the stewardship model and the absence of a local paradigm. This is why Stewards are placing all their efforts in assisting the establishment of the first Greek steward-led companies.
Photo from latest steward ownership conference. Source: so22.org
There are studies indicating that the growth of business over time requires loosening stewardship values and introducing more rigorous agency values. Do you agree with the idea of a “symphony” of agency and stewardship values working together ?
The idea of a "symphony" of agency and stewardship values working together in the growth of a business is an interesting concept. Both agency and stewardship have their own merits and can contribute to the success of an organization in different ways.
Indeed, agency values emphasize on individual initiative, entrepreneurial spirit, and a focus on achieving results. They promote risk-taking, innovation, and competition, which can drive growth and create opportunities for expansion.
On the other hand, stewardship values emphasize collective responsibility, long-term thinking, and a focus on sustainable development. Stewardship values encourage a sense of duty towards stakeholders, including employees, customers, communities and the environment. They prioritise ethical decision-making, social responsibility, and the preservation of long-term value.
While agency values may drive growth and agility, stewardship values contribute to building trust, maintaining stability, and ensuring the long-term viability of the business.
By integrating both agency and stewardship values, an organization can balance short-term gains with long-term sustainability, promoting innovation while considering the broader impacts of its actions. (African proverb: “If you want to go fast go alone, if you want to go far go together”)
The company “Patagonia” recently adopted steward ownership.
-How are Stewards performing in Greece and what are your plans for the near future ?
The support given to the first steward-owned businesses in Greece is taking most of our bandwidth at the moment. Besides that, we are creating a white paper explaining in details the application of Steward Ownership in the Greek corporate context and we are also co-writing a book with external authors, practitioners and academics from all over the world on the subject, planning to have it published by 2024.
Overall, the feedback and support we have received so far is very positive. We respect that the Greek ecosystem is coming out from a decade-long financial crisis and the main goal of most organizations is to establish business and secure their income streams.
It is now though a unique opportunity for the Greek business ecosystem to embrace practices and governance systems which will ensure that it will never again suffer the dramatic consequences of risky practices and short-term gains approach of the past, moving towards a long-term perspective centered around sustainability.
Thank you.