What do Rolex and Patagonia have in common? It’s obviously not watches or outdoorwear.
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.
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. 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.
That question now reaches beyond the familiar debate over purpose-driven business. Europe is spending heavily on digital sovereignty: 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.
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, the 28th Regime is also a rare chance to answer a larger question: what kind of companies should Europe make easy to build?
Melanie Rieback, founder and CEO of Radically Open Security, a steward-owned cybersecurity company, frames the stakes. “The 28th Regime could suddenly give us 27 steward ownership legal forms in every single EU member state at once,” she says. “That’s huge from an economic systems-change perspective.” If those alternative governance structures are included, she adds, “it is going to be an earthquake.”
What Is Steward Ownership, Anyway?
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’s purpose; profits are reinvested, shared or donated according to mission; and asset locks can prevent a sale that would undermine the business’s reason for existing.
Wolfgang Oels, COO of Ecosia, a sustainability focused search engine, explains the practical appeal. “It gives credibility,” he says. “Today, 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.”
That credibility matters because Europe’s 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.
Rieback says: “The half of the story that isn’t being told is that European companies are moving to Delaware or Silicon Valley because they’re getting bought one by one.” In her view, “steward ownership is the only mechanism that exists to counteract the shopping spree of European startups by foreign capital.” A sovereignty strategy that stops at data centers, she argues, misses where control actually changes hands: “Steward ownership is digital sovereignty at the cap-table level.”
Oels expands. “Private equity funds would never buy a steward company, because they could not take out profits, ever,” he says. “So, steward companies would not be a target for foreign investors.”
Why The Legal Form Matters
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—but 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.
Nicholas Young, research fellow in sustainable business law at the University of Oxford, says the current problem is that steward ownership’s key legal ingredients are trapped inside national systems. “Steward ownership can’t scale because the key ingredients are confined to national borders,” he says. “The separation of voting from economic rights isn’t available everywhere, the foundations or trusts that hold stewardship control don’t have equivalents in every country, and the bespoke financial instruments investors use are governed by totally different rules in each Member State.”
An EU-wide form could change that. Young says the proposed regime helps because it allows “flexible share classes, non-voting shares, and transfer restrictions in one pan-European form recognized everywhere.” But, he adds, the current approach is “a good start, not a full solution” 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.
The distinction between a purpose statement and a legally durable mission lock is crucial. “Purpose clauses in most jurisdictions are just statements of intent with no teeth,” Young says. “A shareholder majority can amend them.” Foundation governance can be robust, he adds, but is often trapped in national law with no cross-border portability.
By contrast, Young says, the steward ownership proposal is different because it is designed to be structurally irreversible at EU level: “the lock can’t be picked by a shareholder vote, can’t be circumvented by selling the controlling shares, and travels with the company across all 27 Member States.”
The Succession Problem
Steward ownership’s 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.
“For steward companies, succession is actually much simpler,” Oels says. “All 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’t need deep pockets.”
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. “People dislike when they work for a small salary and the owners get all the money,” he says. “Therefore they want ESOPs. If all the profits go to a cause they like, many are fine with that.”
From Rolex To Ecosia
The pedigree of the model is also becoming harder to dismiss. Rolex is controlled by a foundation. Patagonia’s founder moved the company into a structure intended to preserve its environmental mission. 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. “Steward companies do not have to pay out dividends,” he says. “They cannot do that at all. That money therefore is left to finance their purpose—or to be invested into research.” At Ecosia, he adds, “there is no billionaire who could force us to reduce our reforestation or renewable energy investments for the sake of paying out dividends.”
The Counterargument
Still, the policy challenge is not to romanticize steward ownership or pretend it suits every company. Venture capital has a role in creating fast-growing firms, and exits can reward risk. Critics also raise legitimate governance questions. Young says the strongest argument from shareholder-primacy proponents is that “permanently locking out the market for corporate control removes a key accountability mechanism.” If a company can never be bought, internal governance has to work harder.
But Young also stresses that this concern has limits. “It is also important to remember that steward ownership is entirely opt-in, so it doesn’t remove takeover opportunities from the market generally,” he says. Investors can still provide capital through profit-participation or mezzanine instruments; they simply do not receive control rights.
That opt-in point is central to the argument put forward by steward ownership advocates. Rieback says opponents sometimes frame steward ownership as if it would be mandatory. “No, it’s an option,” she says.
The fight, then, is over whether that option should exist at all.
Europe’s Strategic Choice
For Europe, the choice is strategic. If the 28th Regime includes only the most investor-familiar structures, it may still make incorporation easier. But it would mainly streamline the existing, conventional startup pathway: form, raise, scale, sell or list. But if it includes steward ownership and employee ownership, it could also help founders build companies designed for succession, mission protection, resilience and independence—and give Europe’s sovereignty agenda something it currently lacks: a way to keep what it builds.
Rieback believes the stakes are high. If steward ownership and employee ownership are excluded, she warns, “there’s a really good chance this could just accelerate the liquidation of European companies in the direction of the States.” But if they are included, the 28th Regime could “put steward ownership on the map, legitimate it and really move the Overton window.”
That is why a reform that sounds like tedious corporate-law housekeeping has become a test of Europe’s economic imagination. The 28th Regime will not decide the future of European capitalism on its own, but it might decide which corporate choices become simple, cheap and legitimate across the single market—and whether Europe’s next breakthrough company has anything to hold on to.
Young’s warning is institutional: “The 28th Regime won’t come around again for a generation, so the window either gets used or it stays shut.”
Rieback is even more direct: “This is a huge opportunity, but if these options aren’t in there, it’s also a huge threat.”
