Putting our mission first: how we're reinventing business governance
It's possible to run a business that serves society and the planet. We're creating a balanced company structure that legally requires directors and shareholders to put our mission first.
This blog is written by Library of Things co-founders and co-directors Emma Shaw, Bex Trevalyan and Sophia Wyatt. It’s part of a series of stories on #purpose-before-profit, you can find links to the other stories at the end of this post.
We started Library of Things to tackle wasteful consumption and make borrowing better than buying for people and planet. That is the purpose of the company, the mission that drives us personally and collectively.
Our mission is the boss – legally
It's a bit bonkers, but UK company law – and culture – says that the primary purpose of companies is to create value for shareholders (profit).
So we had to tinker with legal norms to create a company structure that legally requires directors and shareholders to put our mission first. This is enshrined in our articles of association, investment and partnership agreements, and (soon) in our employment contracts.
The point is that everyone has a role to play in realising, protecting and benefitting from that mission. Whether that’s our borrowers, partners, team, investors and even the planet. Collectively, they are the Library of Things community and they are why we exist.
The silent revolution in company purpose
We realised that to fix the broken consumption system, we also needed to fix the broken system of capital that goes hand-in-hand with it, which is typically extractive from a company’s stakeholders, in pursuit of purely financial growth.
The silent revolution is the way Library of Things is doing business, not just what they do as a serviceTrudie Fell, Co-founder of BelleVie home care platform.
Like similar steward-owned businesses, the way we do business is integral to the mission. Ines Schiller, co-founder of sustainable tampon brand Vyld puts it well, “it just doesn’t make sense to produce a great, sustainable product, but then have an exploitative company structure and culture.”
Our goal is to create a regenerative business that creates value for society as a whole in the long term.
Our investors are a fundamental part of making that possible. They hold non-voting shares, sign an agreement committing to putting the mission first and can expect to receive a fair financial return.
Our community holds us accountable
With the mission as our north star, we wanted to go one step further. How would we know we were keeping on track? We needed a way to be held independently accountable by our wider community.
That’s where the guardian shareholder comes in, a separate non-profit company whose members – or “mission guardians” – represent the wider Library of Things community. Currently there are three members, representing borrowers, local partners, investors and planet.
It’s designed to be a small, balanced group. The purpose is to bring different stakeholder perspectives to major strategic decisions – seeking advice and providing a sounding board to consider the impact of decisions on the community most affected by Library of Thing’s activities.
The guardian holds hard powers too, with the ability to veto decisions around an exit or major asset sale that would be against the Library of Things mission.
The intention is for this membership to evolve over time, to include more representatives of the growing community.
Governance is a practice
So, how does this actually work? Over the past 12 months, we’ve been putting the idea into practice and learning how we “do” this governance in real life. Here’s what’s working well so far:
- Transparency: making sure that our community is informed about the company’s progress, by sharing a quarterly update with the team, investors and mission guardians – so they all have access to the same information.
- Trust: creating space for people to connect on a personal level at virtual ‘Open Board Nights’, to share their motivations for being part of Library of Things, whether as a team member, investor or mission guardian. For the team in particular, it’s been refreshing to see that our investors are partners on the same page, not distant shareholders only interested in finance!
- Balanced dialogue: giving representatives of our community a seat at the table felt daunting at first, but has proven immensely valuable as a platform to seek advice on strategic opportunities and challenges, from fundraising to partnerships and product development. At one Open Board Night, the question of “how do we respond to overwhelming demand to support hundreds of Library of Things?” created a healthy conversation, where our investors and mission guardians pushed us to work not just with partners in typically affluent areas, but to invest equal energy in more deprived towns and neighbourhoods too.
This is just the beginning. With a crowdfunding campaign that will see hundreds of people become co-owners of Library of Things, and plans afoot to partner with councils and communities around the country to get their neighbourhoods borrowing, the community is growing fast.
Embracing radical transparency, what else should we share and open up to our community? Which groups are currently not represented, whose voices should be heard? And how do we ensure this governance model continues to be both practiced and practical to evolve, as the company and community grows too?
We’d love to see in-person gatherings like an annual festival to build trust and connection, alongside smaller in-depth spaces to work through challenges whilst making the most of the community’s own expertise and experience.
There are increasing numbers of peers getting in touch from around the world, who want to restructure or set up their companies the same way. Join us! We commit to learning in public with you.
You can learn more about the opportunity to become a co-owner of Library of Things and see our Open Board Nights in action, by joining our crowdfund campaign over on Ethex: https://www.ethex.org.uk/invest/library-of-things
Check out the other articles in our series to learn more about how we're putting purpose before profit