Trusteeship – the future of business?

Prince Kropotkin, a Russian naturalist, travelling through north America over 100 years ago, passed through a native American Indian village.  Being interested in social organisation, he observed that the land was owned by the village as a whole while individual villagers would work parcels of the land and eat what they grew.

This is of course a familiar ownership structure. In the UK it is the standard arrangement for, among other things, allotments. the land is owned by the local council or allotment society while the individual allotment holders, provided they follow the rules, are free to eat what they grow. A similar structure is found in many markets, where the land is owned by a charity or public body and the stall holders are independent traders who pay a rent.

Could it be that this simple structure offers a clue to how we might organise business differently, helping preserve our natural resources while encouraging the creative and entrepreneurial spirit in people? I believe it does.

This is no wild theory – there are businesses already organised in this way. The Scott Bader Commonwealth, founded in 19___, is owned by a charity that aims to serve the common good. Businesses as diverse as retailer John Lewis Partnership, the AtoZ Map Company, engineering consultancy Ove Arup, open source software project Apache and white goods manufacturer Bosch are owned or part-owned by trusts.

Trust-based businesses tend to be sustainable, in the sense that the business often survives over a long period. “A Trust-based model of employee ownership is proven to be the most sustainable” reported the Ownership Commission recently. There is something about trusteeship that encourages a long-term perspective, and some enlightened owners have recognized this. For example, Mærsk A/S, a large Danish conglomerate, is majority owned by a trust, established by founder A.P. Møller in 1953, “to ensure that his life’s work would always be owned by parties that held a long-term view of the company’s development.”

The change from private ownership to trusteeship affects everything in the business – the governance, the culture, the leadership models. Rather than serving often remote masters, the leaders within the business are now serving the community. This is challenging stuff because it is, in essence, questioning the supremacy of private ownership, one of the cornerstones of the constitution of virtually every country in the world.

This is why I welcome James Quilligan’s work on the Commons. It helps provide the intellectual underpinning to our work on trust-based businesses, reminding us that we can create other types of goods, other types of ownership, without completely abolishing private ownership. It emphasizes the importance of preserving our shared heritage, while encouraging human beings to realise their full potential.

The Author: Patrick Andrews   1 May 2012

Patrick heads up the research and learning work at Working in Trust, a project that aims to foster the development of trust-based businesses balancing the needs of the environment, of the community and the staff. Patrick was formerly a corporate lawyer, employed by large corporations including Pratt & Whitney and Kingfisher to handle mergers and acquisitions.  He is on the board of eco-car company Riversimple