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By: Sung-Hyui Park and Olivia Brooks
Bates Wells explores some of the key learnings from Patagonia’s example, and how the ‘steward-ownership’ approach can help businesses ensure the resilience of their purpose and values in the long run.
In late 2022, global outdoor clothing and equipment business Patagonia made major changes to its corporate structure, highlighting the creative options available to founders wishing to embed purpose into the fabric of their organisation.
The entire issued share capital of Patagonia is now held by the Patagonia Purpose Trust and the Holdfast Collective, with each entity having a specific role to play in ensuring the business’s corporate purpose. Ownership is now structured so that the dividends of Patagonia will be invested in combatting the current environmental crisis. This is projected to be worth somewhere in the region of USD$100 million per year, depending on Patagonia’s financial performance.
A recent trend shows that some shareholders are re-evaluating their company’s purpose and changing focus from short-term financial return to long-term impact for multiple stakeholders; an approach that recognises the interdependence of people and planet with profit.
It will be interesting to see if the changes made by Patagonia inspire other purposeful businesses to consider shaking up their ownership structure to achieve their long-term goals. Steward-ownership may be of particular interest for family or founder-led businesses considering protecting the longevity of the business’ purpose, or to any business that wants to demonstrate its genuine commitment to a triple bottom line.
