Background
We define enterprise foundations as foundations which own business companies. In this unique ownership model a non-profit entity (the foundation) owns a majority of the shares of a business company. Most often the foundations will have charitable goals, but mainly it serves the important function of owning and controlling a company. Some of Europe’s largest and most successful companies are owned in this way – Carlsberg, Ikea, Bosch, Rolex, or the Swedish Wallenberg companies.

In this research project we aim to investigate enterprise foundations and foundation-owned companies in Europe. How many are there? How large are they? What is their share of output and employment?  How does foundation ownership influence company behavior and performance? We aim to understand both commonalities and differences in the way foundation ownership is structured, for example differences between the German, Swedish and Danish models.

The project builds on previous work in the research project on industrial foundations (www.tifp.dk) which focused mainly on Denmark. It will extend and develop this project to the European level and as far as listed companies are concerned also to the global level. It will be carried out by an international research group with Copenhagen Business School as the anchor institution.

Motivation
There are several compelling reasons for a European research project in enterprise foundations. Enterprise foundations are important in Europe, but relatively little is known about them outside Denmark. Important issues like governance, regulation and taxation of enterprise foundations have not been addressed by contemporary research. Enterprise foundations have unique characteristics which seem to make them uniquely suited to address a range of concerns about contemporary capitalism, including short-termism, social responsibility and wealth inequality. It seems logical to examine whether they can function as a role model for European businesses.

However, ignorance also implies risks of uninformed or biased regulation if enterprise foundations are misunderstood in international policy circles as was for example the case in recent EU legislation on beneficial owners, which mistakenly assumed that foundations were ultimately owned by their board members. In a more interventionist policy climate such risks will increase.

Purpose
The purpose of the project is to provide a fact- and research based background for policy and strategy discussions about enterprise foundations.  We intend to investigate whether it is meaningful to talk about a “European Enterprise Foundation”, how this structure can create value for business and society, how it should be governed, regulated and taxed.

Enterprise foundations have the potential to address many concerns about contemporary capitalism.  As long-term owners they are less sensitive to short-termism. They are purpose rather than profit driven (as stipulated in their charters) in line with recent recommendations. They are socially responsible (e.g. philanthropic) they counteract rising economic inequality since their wealth is owned by the foundations rather than by private individuals. Therefore it is particularly important to examine their strengths and weaknesses and to what extent they can be a corporate governance model for the future.

Approach
The project will start with a mapping of enterprise foundations in Europe. How many are there, how large are they, what is their share of the economies of the different member states.  This mapping of foundation owned companies will be supplemented by a mapping of the legal frameworks in the different member states and case studies of large foundation-owned companies.              

The second step will be to match foundation-owned companies with a control group of companies of similar size and industry. The objective will be to examine the behavior and economic performance of foundation-owned companies relative to other ownership structures like family business and investor ownership. Thirdly, we will undertake a similar global study of publicly listed foundation-owned companies compared to family and investor owned companies.

Organization
The project will be organized in cooperation with the Novo-Nordisk Foundation chair of enterprise foundation governance at Copenhagen Business School and the Forum for Research in Enterprise Foundations, a joint venture between several European universities, including Copenhagen Business School, the University of Copenhagen and the University of Lund.   

The forum will be instrumental in mobilizing European researchers in a joint effort to research enterprise foundations, organize joint conferences and seminars, and communicate results to the wider public and to organize research-based teaching in the area. Technically, a foundation is a self-owning non-profit entity, which does not have outside owners and is created by the founder’s irrevocable donation of shares or other assets to the foundation. It is governed by an independent board supervised by private courts or government regulators.  Foundations which own a controlling share in a business company are defined as enterprise foundation regardless of their purpose (charity, business continuity, family support etc).