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A founding idea

WALA was founded by Rudolf Hauschka in 1935. It began operating as a general commercial partnership (OHG) in 1953. How did the WALA founders determine a company’s value back then?

Rudolf Hauschka, Max Kaphan, Maja Mewes and Margarethe Hauschka-Stavenhagen understood the term “company” not as an unconditional pursuit of material profit, but as a task. The day-to-day activities of employees were also not meant to be determined by profit maximisation or the capitalist self-interest of owners. According to the founders, WALA’s task was and remains to provide customers with medicines and, later, cosmetics that are in harmony with human nature. These are based on the research of Rudolf Hauschka, which he began at the request of doctor Ita Wegman in Arlesheim in 1929 and continued independently later on. It was important to him and his colleagues to maintain the momentum behind this work.

What steps were taken back then to safeguard the catalyst for founding the company?

For one thing, contractual provisions relating, among other things, to succession and inheritance were added to the partnership agreement. However, the quartet of founders was well aware that this type of purpose limitation is always dependent on the goodwill of shareholders. Nevertheless, they took a personal interest in ensuring that the company would remain committed to the objectives established when they founded it for a long time to come. It seems that the search for a solution that would make this truly ‘watertight’ in a legal sense caused them a lot of headache. When I studied the files in the archive, it became clear that they tried to solve this problem over many decades by seeking advice from multiple consultants.

The founders of WALA OHG. Left to right: Dr. Rudolf Hauschka, Max Kaphan, Maja Mewes, Dr. Margarethe Hauschka-Stavenhagen.
Photo: WALA

And the solution ultimately found was to convert the company into a foundation?

Yes, the two shareholders back then, Karl Kossmann and Heinz-Hartmut Vogel, decided to take this radical step in 1986. They were the successors to Max Kaphahn and Margarethe Hauschka-Stavenhagen, respectively, and had been connected to WALA as shareholders for decades. By establishing the foundation, Kossmann and Vogel wanted to ensure that the company would above all remain bound to its founding purpose in the future.

What were the consequences of this decision for the shareholders and the company WALA?

They waived their ownership rights and transferred the lion’s share of the company’s assets to the non-charitable WALA Foundation and a smaller share to the charitable Dr. Hauschka Foundation. Ever since then, WALA Heilmittel GmbH has been the business and WALA Foundation its sole owner. No family, individual or legal person can influence or lay claim to the assets. Self-serving activities and intentions and the exercise of power as a result of capital ownership are systematically prevented. In addition, the foundation’s purpose is set out in articles of association, and compliance with these is overseen by a state authority.

Today, this issue has once again become very relevant. A new form of company, the ‘steward-owned company’, is currently being introduced. What does steward ownership mean?

The plan is for a new legal form that puts the meaning and purpose of a company first. Accordingly, the capital of a ‘steward-owned company’ should not be subject to speculation. In principle, this is the very solution that shareholders have long been looking for for WALA. The ‘steward-ownership’ model is undoubtedly not suited to every company, but it lends itself to family-owned companies without succession arrangements, for example. It could also be an attractive option for founders. Ways in which the model is already being implemented and could be implemented in future were discussed recently at the Day of Steward-Ownership conference.

Thanks for taking the time to talk.

Dr. Philip Lettmann, Chairman of the WALA Management Board (4th from the left), exchanged thoughts with German Federal President Frank-Walter Steinmeier in person at SO:23.
Photo: Anna Wyszomiersk

‘Property entails obligations’

In a time of great change, this principle gives German Federal President Frank-Walter Steinmeier visibility. During his opening speech at SO:23, the Day of Steward-Ownership in Berlin, he empowered the participating steward-owned companies:

‘Every company that is serious about even just a small part of our very broad interpretation of the term “steward ownership” reinforces the power of the idea of free social market economy and the liberal order, including in the context of global competition between systems.’