Foundation Ownership and Firm Performance

Abstract

Foundation ownership of business companies is a governance structure which combines philanthropy and business. It is common in Northern Europe, particularly in Denmark. This chapter explains the basic governance structure, including the role of the foundation boards and company boards in foundation-owned companies, as well as the role of foundation law, government supervision and capital markets. It goes on to review the international evidence on the performance of foundation-owned companies, drawing on academic research from Scandinavia, the Netherlands, Germany, Italy and the US. The evidence indicates that foundation ownership is a financially sustainable and socially responsive governance model, which could be more widely used around the world. However, successful foundation ownership requires a climate of good governance that cannot be taken for granted.