“We refer to what you have done in Denmark as capitalism’s best-kept secret.”
It is not flattery, but a laconic observation from Greg Curtis.
In 2022, the founder of U.S.-based outdoor apparel company Patagonia decided to give the company away to protect nature – and its own mission.
Greg Curtis was one of the architects behind the ownership model which made the financial world stop and stare. In international business media, it was described as “radical” and “unprecedented.”
In reality, it was built on solid evidence and long-standing experience.
When Greg Curtis and the Patagonia leadership team set out to find a model that could safeguard Patagonia’s values far beyond the lifetime of its founder, they did not look to Silicon Valley. They turned their gaze to Europe – and first and foremost toward Denmark.
There, he and the team found a model that for more than 100 years has offered a convincing answer to the challenge much of global business now faces: a silver tsunami.
An Old Answer to a Newer Problem
Patagonia’s situation was both unique and universal.
An aging founder. A company with strong values. A global capitalism in which ownership can change hands in a matter of months — and where new owners can fundamentally alter a company’s direction.
How do you protect a mission when you are no longer at the head of the table?
That question is not only relevant to American outdoor giants. It is business-critical for thousands of founder-led companies around the world today.
The so-called “silver tsunami” is sweeping through global business. Owners are retiring. The next generation may be unable or unwilling to take over. Selling to private equity or industrial buyers becomes the default solution.
But in Denmark, a fourth path has existed since the late 19th century. It was that path Patagonia chose.
What Has Denmark Created?
The Danish model of commercial foundations is, at its core, an ownership architecture.
Ownership is placed in a foundation with a defined purpose. The foundation owns the company and appoints the board. Profits can either be reinvested in the business or distributed for charitable purposes.
The decisive feature of the structure is that ownership cannot be sold. The capital is structurally locked.
In practice, this means that control over the company cannot be converted into private gain. There is no exit button. No one can sell the company to the highest bidder and monetize control.
That fundamentally changes incentives. The model removes the exit incentive, reduces generational transition risk, and institutionalizes long-term thinking.
Today, foundation-owned companies constitute a significant part of Danish business – including major corporations such as Novo, Maersk, Carlsberg, William Demant and Grundfos. The model is embedded in the core of Danish capitalism.
Research by Professor Steen Thomsen at Copenhagen Business School and others shows that foundation-owned companies perform on average as well financially as other firms – and in some cases better.
They invest more long-term. Employees tend to stay longer.
“What has been happening in Denmark for more than 100 years proves that philanthropic ownership works – across generations and transitions of power and control. It is compelling evidence of the model’s durability,” says Greg Curtis.
Researcher: “You Have to Dare to Give Power Away”
Mark Ørberg, Assistant Professor at Copenhagen Business School, emphasizes that the strength of the Danish model lies not only in locked capital – but in governance.
“What works well in Denmark is the possibility of active and engaged ownership,” he says.
The foundation appoints the board and can reconfigure management if the company drifts away from its purpose – not through micromanagement, but through structural protection.
But it involves a real trade-off.
“If you want permanent protection of the purpose and the associated tax advantages, you have to give it away,” Ørberg says.
It is a deliberate prioritization of stability over maximum value optimization.
Separating Power and Money
The first Danish company to become foundation-owned was Carlsberg. The commercial foundation was established exactly 150 years ago, in 1876. Six years later, ownership of Carlsberg was transferred to the foundation.
With that, Denmark saw its first example of what is today known internationally as steward ownership.
In recent years, a global movement has emerged that advocates for this type of ownership model.
Christoph Bietz, Communications & PR Lead at the Purpose Foundation in Hamburg, is part of that movement.
The Purpose Foundation is part of the Purpose Group that works to raise awareness of steward ownership, advises companies on how to implement it, and also operates two investment vehicles specialised on steward ownership aligned financing.
At the core of the concept lies a different understanding of ownership.
“In the common ownership logic, you buy in, gain control – and at some point, short-term profit possibly becomes more important than the actual purpose of the enterprise. In many cases, this causes fundamental problems,” says Christoph Bietz.
Steward ownership offers an alternative: it separates power and money. Control of the company cannot be sold, for instance to the highest bidder, and profits cannot be extracted for personal gain.
This means that capital is bound to the company, its development and its purpose. Owners act as stewards of the enterprise.
“With steward ownership, you legally ensure that the purpose always remains at the center.”
This is where stewardship moves from technique to values. From structure to identity.
A Lighthouse for Steward Ownership
For Purpose, it was a major milestone when Patagonia chose steward ownership in September 2022.
“It was a huge moment for us. It was exactly what we had always hoped for,” says Christoph Bietz.
“If a company like Patagonia – which has always been known for its strong sense of purpose – were to adopt steward ownership, it would become another big lighthouse for us in showing the world that it works.”
Although awareness of steward ownership is growing, wider adoption remains a challenge.
“The topic is still not on most people’s radar. Everyone thinks they know what ownership is, but hardly anyone questions it. In fact, steward-ownership can be a powerful lever for entrepreneurs and investors who want to keep companies independent and purpose-driven,” says Christoph Bietz.
Purpose identifies three main barriers: lack of awareness, legal complexity, and a lack of financing structures many of which are still designed around the predominant exit logic.
“But investors are increasingly looking for more sustainable ways of investing, and a growing number of cases show that funding is possible without sacrificing a company’s independence, while investors still receive fair dividends,” says Christoph Bietz.
“We see more and more entrepreneurs actively looking for different ways to structure their companies,” says Christoph Bietz, “because they do not necessarily want to sell to the highest bidder and risk losing their mission orientation.”
“But financing instruments that still push toward rapid profit won’t work here, as steward ownership requires long-term capital.”
“We still encounter a lot of scepticism. A case like Patagonia doesn’t eliminate the complexity, but it makes it much harder to dismiss the model as utopian,” says Christoph Bietz.
The Model Is Strong — But Not Sacred
“Steward ownership does not automatically make a company more sustainable in an ecological or social sense. It is a legal tool that keeps a company independent and its purpose at the center. If that purpose is to produce weapons, the company could still be transformed into steward-ownership,” says Christoph Bietz.
“But its stewards couldn’t personally benefit from the profits of the weapon production. So now you can ask yourself: Which ownership structure would you prefer for a weapon company? A structure that allows speculation or one that makes sure profits serve the company itself, its purpose and stakeholders?”
This is why it’s so important that the model is open to any kind of business, Christoph Bietz explains.
“We know from research and studies that in fact steward-owned companies act more sustainably, are more innovative and also more resilient in crises,” he says.
There Will Always Be Loopholes
But structure alone cannot define substance.
That is precisely the concern raised by Oscar Haumann.
Together with Marcus Feldthus, he co-authored the book Smådriftsfordele (Small-Scale Advantages), which explores alternatives to aggressive growth.
In the book, they examine steward ownership as a way of preserving corporate values and integrity — and highlight the structural strength of the model Patagonia has chosen.
“It can remove incentives tied to decision-making power and personal financial gain. You can lock the purpose and appoint independent stewards to protect it,” says Oscar Haumann.
But he warns against confusing structure with substance.
“The model has strengths. But it also depends on what the company actually does. Does it exceed planetary boundaries? If the underlying business model is problematic, you may simply be protecting something that should not be protected.”
Steward ownership may be the best tool currently available, Haumann argues. But it is not perfect.
“There will always be loopholes,” he says.
“The point is to make them as small as possible.”
Ownership Is a Choice
So, is the Danish foundation model capitalism’s best-kept secret?
Perhaps not a secret – but rather a reminder that ownership is not a law of nature. It is design.
The model is not perfect. It is not universal.
But it exists.
And for more than a century, it has demonstrated that capitalism can be organized differently – if we dare to design it that way.
