Riversimple’s model of governance is structured to represent and be relevant to society today, just as our product and service should be relevant and benefit that society.

We have introduced 6 Custodians, each representing a fundamental part of modern life – the Environment, the Customers, the Community, the Staff, the Investors and the Commercial Partners.

How did we come to this solution? As with all aspects of the business, we started with a clean slate. Riversimple MD Hugo Spowers explains:

“The business was founded to address the enormous environmental damage created by personal transport and the original intention was to serve the ‘basket of interests’ so often referred to by economists.  The interests of investors are not well correlated with the interests of society and the planet, and we are riddled with market failures, so the intention was to internalise the governance that a more ‘perfect market’ would theoretically deliver; embedding the Purpose structurally in the governance of the company, rather than relying on altruism.

Shareholder value has primacy in UK law, so we felt that the simplest way to deliver that without a conflict of interests was to make the Environment and other key stakeholder groups shareholders, but without equity rights.  The Board’s duty is to pursue the Purpose while balancing and protecting the benefit streams of all six stakeholder groups, rather than maximising the value of one.  It is essentially a partnership model and you cannot have a partnership in which one partner has control, because then it’s not a partnership.”

These six stakeholder groups are all critical to the success of the business but we cannot hope to maximise the goodwill of five of them if their interests are subordinated to the sixth.  There is no inherent conflict between these interests; if the business is designed in this way it will garner a greater level of goodwill than is possible in a single stakeholder entity, delivering a more profitable and more resilient business.

The intention is to make more money from doing the right thing than business as usual makes from doing the wrong thing.  Inputs come from various stakeholders, putting in human and natural capital as well as financial and seeking entirely different but non-competitive outcomes.  Balancing these interests is better for all concerned than prioritising one stakeholder group.

We are very fortunate to have exceptional individuals in each custodial role.

Environment

Peter Lang, environmental consultant and researcher

Customer

To be appointed

Community

Peter Davies OBE, first Commissioner for Sustainable Futures in Wales

Staff

Bill Whyman, procurement manager at Riversimple

Investors

Leon Kamhi, Head of Responsibility, Federated Hermes International

Commercial Partners

Juergen Maier CBE, ex CEO of Siemens, UK

The Custodians meet regularly, facilitated by the company Steward, Estelle Clark.

“I absolutely believe this new model will be of generic value.  People have talked about multi-stakeholder governance before but it isn’t really happening. We have looked at a very successful organisation – Fairtrade – that was set up to balance two stakeholder groups – the interests of the investors and the interests of the suppliers in developing countries.  That was a true ‘twin stakeholder’ governance model but it’s very rare and we haven’t come across anything like our model. We’re calling it a  Future Guardian model of governance. 

At the moment we are working through unexplored territory so by definition there are some unknowns.  If there is one unifying theme though, it is about aligning the interests of all across industry, commerce, society and the planet.  This is important for businesses everywhere, not just because business has to provide answers to 21st Century issues, but because the consumer increasingly demands it.”