Berrett-Koehler Publishers: Securing a Legacy of Independence

As founder Steve Piersanti looked to retirement after 30 years leading Berrett-Koehler Publishers, he faced a critical challenge: how could he ensure the company's strong stakeholder focus and independence endure without him?

The solution came when partnering with Common Trust to establish a Purpose Trust as a growing Berrett-Koehler shareholder. This strategic plan secures Berrett-Koehler's mission regardless of leadership changes, allowing the publisher to remain an independent B Corp, benefit all stakeholders, and stay true to its founding purpose for generations to come.
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A legacy of stakeholder focus

Since founding Berrett-Koehler in 1991, the company has distinguished itself in the publishing industry through its deep commitment to serving all stakeholders—including authors, employees, suppliers, owners, and society. The business pioneered multiple author-friendly practices, like paying royalties based on retail rather than wholesale prices.

Berrett-Koehler formalized their multi-stakeholder approach by creating an industry-first constitution that provides a voice to employees, authors, and partners. The company cemented its mission by becoming a B Corp in 2011 and transitioning to a legal Benefit Corporation in 2015. However, as Steve prepared to step down as CEO in 2019 after 27 years at the helm, the question remained: how to extend this impressive stakeholder legacy beyond the founder's presence?

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The high stakes succession challenge

"Based on what I have seen happen to other publishing companies, it's hard to imagine the most valuable and distinctive aspects of Berrett-Koehler enduring if BK was sold to another company," founder Steve Piersanti explains.

With Steve holding a controlling ownership stake and approaching retirement, the carefully cultivated mission-driven culture faced potential disruption. A traditional sale or unplanned succession could jeopardize the company's independence and stakeholder values that took three decades to build. The stakes were high: without a purposeful transition plan, everything that made Berrett-Koehler unique could be at risk.

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The Purpose Trust solution

After extensive research and deliberation, Steve and the Berrett-Koehler board decided that a Purpose Trust offered the best long-term solution.

Unlike conventional ownership transitions, a Purpose Trust would:

• Serve as a shareholder with a legal obligation to protect the company's independence
• Safeguard the multi-stakeholder commitments in core ownership documents
• Provide ongoing representation for stakeholder interests
• Make the company's mission its permanent guiding principle

This approach would provide stronger protection than simply appointing a new CEO or selling to another entity, as it would embed the purpose directly into the ownership structure.

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Building a sustainable ownership model

Working closely with Common Trust, Berrett-Koehler developed a comprehensive plan for its new Purpose Trust and redesigned the company's ownership structure around it.

The transition to a Purpose Trust would involve:

• Converting nearly half of Steve's shares into a long-term company loan transferred to the trust
• A planned donation of some remaining shares to the trust over time
• Inviting longtime shareholders to contribute shares through donation or sale
• Designing the trust to maintain a substantial ownership stake with authority to block any company sale or significant deviation from its mission

Meanwhile, Berrett-Koehler raised new rounds of long-term capital in 2020 and 2021, enabling all stakeholders to invest in the company's purpose-driven future.

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Establishing balanced stakeholder governance

When fully implemented, this ownership transition will position the Purpose Trust to hold approximately 35% of shares, positioned as a long-term mission anchor. The existing Employee Stock Ownership Plan (ESOP), foundation, and community of reader-investors will continue as co-owners. This diversified ownership approach ensures Berrett-Koehler is governed in a way that serves all stakeholders rather than any single group—a natural extension of the company's constitution that gives voice to each stakeholder constituency.

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Securing the mission for future generations

"Berrett-Koehler has long sought to both curate and amplify messages of positive change from pioneering authors to create a world that works for all, and to model how next-generation companies can put these groundbreaking ideas into practice," says CEO and CFO David Marshall.

By embedding Berrett-Koehler's independence and stakeholder commitments into its legal structure through the Purpose Trust, the company has created an enduring way to carry its mission forward. Authors can trust that the company will continue championing their visionary ideas, employees can build meaningful careers, and readers can count on Berrett-Koehler to keep publishing books that promote more ethical and inclusive business practices for decades to come.

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Take the next step in your succession planning

Common Trust is helping companies nationwide follow in Berrett-Koehler's footsteps by transitioning ownership on their own terms.

Are you a business leader looking to empower your employees, drive long-term success, and transition ownership while creating a lasting legacy? Book a session with an expert on our team to learn more.

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