Trust-foundation ownership of an industrial pioneer
Entrepreneur, industrialist, and philanthropist Robert Bosch started planning for the long-term ownership of his company decades before his death in 1942. Since 1964, the Bosch Group has been held under a trust-foundation structure that has maintained the innovative strength and social commitment of its creator.
The Bosch Group is one of the leading technology and service companies in Germany. In 2017 it employed over 402,000 people and reported €78 billion in revenue and roughly €4 billion in profit. The group has expanded globally since its founding in 1886 in Stuttgart by Robert Bosch, and now has around 400 subsidiaries and regional companies in approximately 60 countries. These organizations produce a variety of products, from home appliances, power tools, and automotive parts to industrial equipment for commercial buildings and airports to medical equipment, railways, and trains. Bosch products can be found in almost every car, smart device, and home around the world.
Robert Bosch led and owned the company until his death in 1942. He began laying the groundwork for the future governance structure of the Bosch Group prior to his death, and experimented with different forms of ownership.
On his 80th birthday announced his wishes for the future of his company: “I ask you to share this spirit of dedication to our common cause […] and to continue in this spirit, for the sake of each and every associate, and for the sake of the company that, as my life’s work, is so close to my heart.”
In his will, Bosch outlined three possible future ownership structures for the company. Ultimately, the executors decided that the trust-foundation model outlined in Bosch’s will was the best solution to ensure the long-term success of the company and fulfil his wishes.
Under this trust-foundation structure separates voting and economic rights into two share classes: 92 percent of the economic rights of the Bosch Group (B-Shares) lie in a charitable organization, the Robert Bosch Foundation.
The Bosch family received 8% of the company’s dividend shares, which they still hold today. All the shares they previously held beyond the 8 percent threshold were bought by the Bosch Foundation at their market rate. 93 percent of the shares with voting rights (A-Shares) are held by ten steward-owners. These shares cannot be sold or inherited. Instead they are passed from one generation of stewards to the next. 7 percent of the voting rights remain with the family.
Bosch’s stewards-owners, and those who followed, are responsible for the company’s continued success and its adherence to its mission. This structure has secured the company’s lasting entrepreneurial freedom, while maintaining its links to the Bosch family and using its dividends to support charitable and social causes.