The idea behind purpose driven organizations is that the purpose is truly leading all the decisions made throughout the organization. At all times. Thus creating a safe and predictable environment in which everybody can thrive.

This in contrast with more traditional governance structures where the CEO and ultimately the shareholders can also decide based on other non-purpose driven interests.

The question then becomes how to structure governance so that it supports the former and discourages the latter. Easier said than done but I believe we have now cracked this nut through an adapted governance structure.

At the core of this simple governance structure are the following 3 principles:
1. a foundation is 100% owner of the operating company
2. this foundation is led by representatives of all relevant stakeholders
3. all decisions are made based on integrative decision making principles

Relevant stakeholders might vary according to the specific eco-system of the organization but always include: the purpose, the operating company and the employees. And probably also the funding partners, the environment etc..

The consequence of this is that ultimately decisions are always made in service of all stakeholders involved including the purpose of the company. Thus avoiding the opportunity for CEO’s and/or shareholders to divert the organization towards more personal and possibly non-aligned purposes (such as a sale to a non-aligned highest bidder).

This structure can be realized within the existing legal and tax systems (whereby value creation can be distributed to finance partners through an underlying ‘operating’ co-operation). For the Netherlands an open source version of standard articles of associations of both the overarching foundation and the operating company are available.

For more information see the draft purpose driven Articles of Association below (with a nice paragraph on integrative decision making) or connect to Red Turtle or Breathe.