ownership.md 2.4 KB
layout: module title: Ownership permalink: /modules/ownership/ summary: An organization is controlled through rights of possession by one or more owners.
type: structure
Ownership is an umbrella term for a varying series of legal rights over particular entities. In the case of private corporate entities, ownership is a mechanism for claiming and clarifying governance rights.
Input: Corporate entity, specified rights of ownership
Output: Specified owner involvement in corporate governance
Background
Modern corporate ownership emerged during the rise of colonial and industrial economies, as a means of managing the complex financial arrangements necessary to capitalize those endeavors.
Lawyers frequently refer to ownership as a "bundle of rights," suggesting that it is not a fixed or stable phenomenon but one that varies based on design and context.
Feedback loops
Sensitivities
- Clarifies in precise legal terms the governance claims of owners
- Typically organizes influence according to stake in the entity to prevent free-riding
Oversights
- Does not recognize the voices of important non-owning stakeholders
- May obscure important externalities, such as social and environmental considerations
- Inapplicable to non-ownable entities, like nonprofit organizations, information commons, and public-sector resources
Implementations
Communities
- The cooperative business tradition tends to employ ownership rights on a one-person-one-vote basis, rather than the one-share-one-vote model of most other corporate practice
Tools
- Encode offers "integrations of proven models, legal rules, and methodologies for fully distributing authority and ownership in a purpose-driven business"
- Upstock "creates tools and shares knowledge that aligns founders, investors, and team members" through equity compensation
Further resources
- Chassagnon, V., & Hollandts, X. (2014). "Who Are the Owners of the Firm: Shareholders, Employees, or No One?" Journal of Institutional Economics, 10 (1), 47–69.
- Hansmann, H. (1996). The Ownership of Enterprise. Cambridge, MA: Harvard University Press.
- Kelly, M. (2012). Owning Our Future: The Emerging Ownership Revolution. San Francisco: Berrett-Koehler Publishers.