Mission-Lock
Aligning your business interests with your mission statement, society’s and planet’s interests requires including these dimensions in your decision-making processes and criteria. Thus, relying on strong governance legal safeguards and guidelines, as well as trusting sponsors within governance bodies is necessary to sustainably lock your founding principles.
You need long-term safeguards
and a clear mission
to prevent misalignment.
#1 Embedded mission in the company’s DNA
Governance choices are really the backbone of sustainable companies because it settles the common mission as well as the decision-making principles.
Moving from shareholders governance towards mission-led governance is a path driving to long-term sustainability.
Misalignment often come from short-term ownership, capital distribution and voting rights, especially if the company’s ownership as well as the board composition and its role are not consistent with the company’s mission and its sustainable journey.
Governance and alignment of interests are key to building robust and sound relationships with your ecosystem: if your allies trust your built-in engagement towards alignment and benefit from it, they will contribute to make your company thrive.
Key questions you should ask yourself
– Do founders and management value governance/ownership as a long-term business asset?
– To what extent are the company’s legal structure and governance bodies clearly aligned with its mission and its founding principles?
– Are people who are actively engaged or connected to your business, your mission and your ecosystem able to take part in strategic decisions?
– What role should key stakeholders play in the company’s governance?
#2 Aligned legal design
Aligning corporate governance with the company’s mission from the start helps teams to easily manage their priorities and sustainably scale their operations.
Corporate mission success cannot solely rely on founders’ and teams’ commitments. The only way to make it sustainable and robust is through legal documents (bylaws), governance choices and legal long-term safeguards to prevent its stakeholders from misalignment.
If a company does not have any long-term safeguard, it may lead to bad short-term decisions in troubled times and business damage to the company and its ecosystems. Legal safeguards help the company make the best decision when issues occur.
Long-term governance tools often enable a company to make space for its allies in its decision-making process, and then reinforce the strength of its ecosystem.
Key questions you should ask yourself
– How are the mission and key founding principles integrated in the corporate bylaws and the corporate governance bodies? How are they reported on?
– What are the legally binding commitments to long-term mission preservation and evolution?
– What are the structural safeguards to maintain the company’s alignment over the long run and among all its stakeholders? (being incorporated as a benefit corporation/certified by B-Corp/partially owned by employees or by a foundation?)
#3 Reliable sponsors in corporate governance bodies
It is difficult to align oneself in an economy subject to intense financial pressures.
Therefore reliable sponsors within the company’s ecosystem can challenge and provide their support throughout its mission-driven journey.
Knowing that the company has reliable sponsors and stewards by its side is a risk mitigation asset for all stakeholders (shareholders included!).
Key questions you should ask yourself
– Who are the reliable sponsors of the company? (mission-driven board members? committed team members? independent experts? stakeholders engaged in governance?)
– How do founders interact with their sponsors?
– How does the company ensure that board members and key executives have alignment skills and continuously sharpen these skills?
– How does the company manage misalignment/disagreements between stakeholders?
– What happens if the company is not mission-driven anymore?
– Can the company’s mission survive once its founders leave?
Steward Ownership Legal Guidelines
Steward-ownership refers to a set of legal structures that instill two core principles into the legal DNA of a business: self-governance and profits serve purpose.
Term-Sheet for Steward Companies
Download a sample summary and term sheet that represents an overview of a private offering to purchase Series A non-voting preferred stock in a company.
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Shareholder Foundations’ overview
Abstracts from Prophil's European study on shareholder foundations (when a company is owned by a foundation to protect its mission)
Feedback on Time for the Planet’s governance
Start at 1:36 - testimonials on Time for the Planet's governance (French with English subtitles)
Purpose over greed – rethinking capitalism
A 30-minute documentary about Purpose companies and steward-ownership (English and Spanish subtitles)
Mission-led companies – hybrid legal options
Abstracts from Prophil's study on mission-led companies, focusing on legal options that emerged in the US since 2000.