What do Rolex and Patagonia have in common? It\u2019s obviously not watches or outdoorwear. <\/p>\n
Rather, both are examples of companies whose ownership structures were designed to protect purpose over extraction. They are businesses built, in different ways, to last beyond the appetites of short-term capital.<\/p>\n
Such alternative ownership structures, known as steward ownership, are now moving from the margins of corporate governance into the center of European policymaking, as the EU formulates a new legal framework for European businesses called the 28th Regime<\/a>. Behind that bureaucratic-sounding label, also known by its attempted rebrand as EU Inc., sits a potentially consequential reform: an optional EU-wide company framework that would allow founders to incorporate and operate under one harmonized set of rules, rather than navigating 27 national systems.<\/p>\n That question now reaches beyond the familiar debate over purpose-driven business. Europe is spending heavily on digital sovereignty<\/a>: chips, cloud infrastructure, artificial intelligence and strategic autonomy. Yet much of that agenda focuses on the technological stack, rather than the ownership layer beneath it. If European startups, intellectual property and founders can still be pulled abroad by the familiar logic of fundraising and exits, sovereignty remains vulnerable at the point where control changes hands.<\/p>\n For startup lobbyists, the appeal is faster incorporation, simpler fundraising, cleaner cross-border scaling and more familiar equity structures. But for advocates of steward ownership<\/a>, the 28th Regime is also a rare chance to answer a larger question: what kind of companies should Europe make easy to build?<\/p>\n Melanie Rieback, founder and CEO of Radically Open Security, a steward-owned cybersecurity company, frames the stakes. \u201cThe 28th Regime could suddenly give us 27 steward ownership legal forms in every single EU member state at once,\u201d she says. \u201cThat\u2019s huge from an economic systems-change perspective.\u201d If those alternative governance structures are included, she adds, \u201cit is going to be an earthquake.\u201d<\/p>\n What Is Steward Ownership, Anyway?<\/p>\n Steward ownership flips the standard corporate logic. Instead of treating a company primarily as a financial asset to be bought, sold and optimized for exit, it separates control from pure economic extraction. Voting rights are held by stewards committed to the company\u2019s purpose; profits are reinvested, shared or donated according to mission; and asset locks can prevent a sale that would undermine the business\u2019s reason for existing.<\/p>\n Wolfgang Oels, COO of Ecosia, a sustainability focused search engine, explains the practical appeal. \u201cIt gives credibility,\u201d he says. \u201cToday, even oil companies can tell you how green they are. If all your profits have to go to a specific cause, this cause stops being a pretext for doing something else.\u201d <\/p>\n That credibility matters because Europe\u2019s ownership debate is no longer confined to niche governance circles. Policymakers have spent years worrying about digital sovereignty, strategic autonomy and the steady migration of startups, intellectual property and talent to the United States. Many European companies do not relocate because they prefer Delaware paperwork. They move because investors, acquirers and exit pathways pull them there, and because Europe has few simple legal tools that let founders lock in independence before the term sheet arrives.<\/p>\n Rieback says: \u201cThe half of the story that isn\u2019t being told is that European companies are moving to Delaware or Silicon Valley because they\u2019re getting bought one by one.\u201d In her view, \u201csteward ownership is the only mechanism that exists to counteract the shopping spree of European startups by foreign capital.\u201d A sovereignty strategy that stops at data centers, she argues, misses where control actually changes hands: \u201cSteward ownership is digital sovereignty at the cap-table level.\u201d<\/p>\n Oels expands. \u201cPrivate equity funds would never buy a steward company, because they could not take out profits, ever,\u201d he says. \u201cSo, steward companies would not be a target for foreign investors.\u201d<\/p>\n ForbesClimate Scientist Fleeing Wildfires: \u2018We\u2019re In A Race Against Time\u2019By David Vetter<\/a>Why The Legal Form Matters<\/p>\n That claim goes to the heart of the 28th Regime debate. A framework optimized only for investment and exit could make European companies easier to finance\u2014but also easier to buy. A broader regime that includes steward ownership and employee ownership could make it easier for founders to design companies that remain independent, transferable and mission-aligned. In digital-sovereignty terms, it would move the conversation from funding European infrastructure to keeping European control.<\/p>\n Nicholas Young, research fellow in sustainable business law at the University of Oxford, says the current problem is that steward ownership\u2019s key legal ingredients are trapped inside national systems. \u201cSteward ownership can\u2019t scale because the key ingredients are confined to national borders,\u201d he says. \u201cThe separation of voting from economic rights isn\u2019t available everywhere, the foundations or trusts that hold stewardship control don\u2019t have equivalents in every country, and the bespoke financial instruments investors use are governed by totally different rules in each Member State.\u201d<\/p>\n An EU-wide form could change that. Young says the proposed regime helps because it allows \u201cflexible share classes, non-voting shares, and transfer restrictions in one pan-European form recognized everywhere.\u201d But, he adds, the current approach is \u201ca good start, not a full solution\u201d unless it also includes provisions like permanent asset locks, a designated stewardship entity, and harmonized rules for the financial instruments that allow investors to participate without taking control.<\/p>\n The distinction between a purpose statement and a legally durable mission lock is crucial. \u201cPurpose clauses in most jurisdictions are just statements of intent with no teeth,\u201d Young says. \u201cA shareholder majority can amend them.\u201d Foundation governance can be robust, he adds, but is often trapped in national law with no cross-border portability.<\/p>\n By contrast, Young says, the steward ownership proposal is different because it is designed to be structurally irreversible at EU level: \u201cthe lock can\u2019t be picked by a shareholder vote, can\u2019t be circumvented by selling the controlling shares, and travels with the company across all 27 Member States.\u201d<\/p>\n The Succession Problem<\/p>\n Steward ownership\u2019s supporters argue that this is not just relevant to startups. Europe also faces a succession challenge, as founders of small and medium-sized businesses retire. When there is no successor with the capital to buy the company, sale to a larger firm or private equity fund may become the default. Steward ownership offers another route.<\/p>\n \u201cFor steward companies, succession is actually much simpler,\u201d Oels says. \u201cAll you need is a new manager. Shares are given to the next generation of managing owners at nominal value, given they have no right for dividends. Successors therefore don\u2019t need deep pockets.\u201d<\/p>\n That succession logic also changes the employee bargain. Oels does not present steward ownership as a perfect substitute for employee stock plans, but he argues that the psychology of work changes when profits cannot be extracted by owners. \u201cPeople dislike when they work for a small salary and the owners get all the money,\u201d he says. \u201cTherefore they want ESOPs. If all the profits go to a cause they like, many are fine with that.\u201d<\/p>\n From Rolex To Ecosia<\/p>\n The pedigree of the model is also becoming harder to dismiss. Rolex is controlled by a foundation. Patagonia\u2019s founder moved the company into a structure intended to preserve its environmental mission<\/a>. In Europe, companies such as Bosch, Zeiss, Novo Nordisk, Carlsberg and Maersk are regularly cited by ownership-design advocates as evidence that long-term governance can support long-term innovation.
Oels argues that the financial logic is straightforward. \u201cSteward companies do not have to pay out dividends,\u201d he says. \u201cThey cannot do that at all. That money therefore is left to finance their purpose\u2014or to be invested into research.\u201d At Ecosia, he adds, \u201cthere is no billionaire who could force us to reduce our reforestation or renewable energy investments for the sake of paying out dividends.\u201d<\/p>\n