Aligning on capital
Capital that serves the purpose and value creation process
The Breathe approach enables companies to successfully fulfil their purpose while serving the needs of all stakeholders.
At Breathe, we are building inspired companies. Inspired companies are resolute on fulfilling their purposeand serving their stakeholders. Without fruitfully collaborating with aligned investors, Breathe‘s purpose will not be served.
Investors play an important role in allocating capital towards productive enterprises in society. They also have a crucial role in monitoring companies and engaging in ways that promote their success.
Yet, investors are more than stewards of financial capital. Companies do not merely thrive based on financial health alone. They are equally reliant on various types of societal and planetary capital. Consequently, investors must think broadly about the consequences of their enterprise's activities to ensure its sustained success. We see this as an inherent responsibility of stewarding the productive resources of our society. But, as much as it is a responsibility, it is equally a fantastic opportunity to create the world we would like to live in and the world we would be proud to hand over to our children.
At Breathe, we recognise investors' crucial role and are persistent in making our investors successful. Yet, the success of our investors is only one piece of the puzzle. In our approach, we strive for mutual prosperity for all stakeholders.
Our governance model creates the right context for investors to fulfil their role of representing financial capital. Recognising an enterprise's dependence on critical stakeholders, our model integrates these stakeholders so that they may become co-stewards of the company together with investors. We do this by transitioning the company's voting rights to a foundation where investors and other key stakeholders are represented as the company's board. The board then collaborates to make decisions that maximise the chance of the company's long-term success and fulfil its purpose.
To make this governance setup work we, have integrated two crucial considerations into the design of the governance process at the level of the board. First, we have preserved necessary investor rights and protections. Second, while we bring more divergent interests and viewpoints to the table, we have instantiated a decision-making process that avoids consensus-seeking and gridlock in decision making. You can read more about the governance model on the approach to the governance page.
The governance process is designed to help companies chart a course that, in the long run, optimally serves its purpose and stakeholders, including financial stakeholders. If we broaden our value definition further to encompass more than shareholder value alone, a company governed in this way should perform superiorly, all the while remaining financially attractive to investors.
Importantly, Breathe works with a diversity of aligned investors. Because our investors have different objectives, what constitutes a successful collaboration varies. Understanding our investors' needs and pairing investors with opportunities that can fulfil those needs is a crucial aspect of Breathe's approach to capital. For some investors, this means minimising risk, for others, it means favourable expected financial returns. Some investors partner with us to make ground shaking positive changes to a chosen sector through establishing a keystone player that unlocks value-creating opportunities for a whole business ecosystem. Others still venture to tackle a societal issue that has for them personal significance.
In every case, our investors believe in the entrepreneurial power of the purposeful commercial enterprise. We believe in business' potential as a force for good and we are willing to lead by way of example.
To read more about the other four components of the Breathe Approach – Purpose, Structure, Governance and Culture – have a look over here.