You may have seen it in the news. RCN Holiday Parks is being taken over by a large American investor. In itself, this may not be such exciting news. But RCN Holiday Parks was wholly owned by the Interchurch Orientation Centre Foundation (SIOC). All profits from RCN Holiday Parks were used by SIOC for charitable purposes, such as providing free holidays for people who could not afford them. The new owner is unlikely to continue this practice. But what does the takeover of RCN have to do with drug development?

As a foundation, SIOC was the steward of RCN Vakantieparken BV. Steward ownership is a form of enterprise in which voting rights (power) and economic rights (financial interests) are separated, allowing a company to focus optimally on its raison d’être. This is also one of the structures that can be seen at RARE-NL. RARE-NL is a national partnership in which we bring together local initiatives from all UMCs to develop medicines for rare diseases and repurpose drugs in a socially responsible manner. One of those ways is for the RARE-NL foundation to hold shares in pharmaceutical companies as a steward, or to be designated to make certain decisions.

Conditions for corporate social responsibility are included in private limited companies in which RARE-NL is involved. RARE-NL wants to show that drug development can be done in a socially responsible manner. These conditions specify how data will be made accessible, but also how the final price will be determined and what will happen to the profits. And if the company is sold, we want to be sure that the social objective does not disappear along the way. That is why we want to have a say in these matters, regardless of how many shares we hold.

RARE-NL is therefore investigating the possibility of becoming a steward of a private limited company in order to achieve this. This is an innovative form of entrepreneurship for medicines. But we must prevent RARE-NL from selling the private limited companies to the highest bidder. Because at RCN Vakantieparken, the public goal is in danger of disappearing because the company is being sold. That is exactly what we want to prevent. That is why RARE-NL is taking a slightly different approach.

So what can we learn from the acquisition of RCN holiday parks?

• A social objective in the articles of association of the private limited company
  A private limited company does not exist for RARE-NL: RARE-NL exists for the private limited company. We enshrine the social objectives (developing the medicine and making it affordable for as many patients as possible) in the articles of association of the private limited company. The private limited company must then comply with these objectives. As stewards, we naturally want to retain control over any changes to the articles of association.

• We are not the sole shareholder
  To prevent RARE-NL’s interests from interfering with the BV’s objectives, we do not claim exclusive rights to the most important decisions. For example, a patient representative, researcher or entrepreneur involved in the project may have a similar role.

• RARE-NL is not dependent on profit
  When RARE-NL invests time and money in a project, we ultimately want to see a return on that investment. However, for our day-to-day activities and to achieve RARE-NL’s objectives, we are not dependent on profits from the companies of which we are stewards. This allows us to fulfil our role of safeguarding social objectives without any financial interest.

Do we already know exactly how to do this? No. With every project, we learn more about how to put corporate social responsibility into practice. Acting as a steward can be one way of doing this, but it is certainly not the only way, nor is it always the best way. At RARE-NL, we are researching this: PhD student Roel Jonker, for example, is conducting doctoral research into how public interests can be safeguarded in the development of medicines.

Got any ideas or want to brainstorm? Get in touch!

This article by We Are Stewards inspired this column. Read the article to find out what they think about ANBI foundations as shareholders of steward-owned companies.

Sibren van den Berg is director of RARE-NL. RARE-NL is a hub of the Centre for Future Affordable Sustainable Therapy Development (FAST), which aims to promote collaboration between public and private parties in therapy development. The hubs serve as platforms for knowledge sharing, joint research projects and the translation of science into practical applications. Sibren van den Berg is conducting PhD research at Amsterdam UMC, under the supervision of Prof. Carla Hollak, into the availability of medicines for rare diseases.