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.
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.
– 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?
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.
– 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?)
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!).
– 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?
Abstracts from Prophil's study on mission-led companies, focusing on legal options that emerged in the US since 2000.
Term Sheet templates and case studies for mission-driven companies
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A 30-minute documentary about Purpose companies and steward-ownership (English and Spanish subtitles)
Discover in details the governance's principles of Time for the Planet to secure its mission in the long-term.