[Disabled Wings Public Interest Corporation] Europe, Management Succession and Group Control Through Foundations

Germany's 'Robert Bosch Foundation' and Denmark's 'Carlsberg Foundation' as Representative
Securing Group Control through Public Interest Corporations
Annual Social Contribution Expenditure of 200 Billion KRW

Europe is lenient when it comes to exempting inheritance and gift taxes on stock donations to public interest corporations. As a result, there are many cases where foundations control companies through the stocks they receive. This explains why major countries such as Germany and Denmark pursue public interest goals simultaneously while realizing private objectives like management succession. In Europe, the governance structure allowing public interest corporations to hold corporate control is possible because there is no strong perception that this constitutes unfair private gain.

Germany's Robert Bosch Stiftung (hereinafter ‘Bosch Foundation’) is a representative case that has created a stable succession structure controlling affiliated companies after receiving stock donations with tax benefits, while also actively engaging in social contribution activities. Germany exempts gift tax on donations to public interest corporations and also applies inheritance tax exemptions on inherited assets. It is common to exempt taxes on assets donated by the decedent to public interest corporations, charitable organizations, and church corporations.

Public Interest Corporation Controlling Bosch Group, the World's No. 1 Automotive Parts Supplier

The Bosch Foundation controls the Bosch Group, which ranks first globally in automotive parts sales. Bosch GmbH, the parent company of the Bosch Group, is a privately held company, and the Bosch Foundation owns 92% of its shares, thereby controlling the group.

However, the Bosch Foundation does not intervene in the group’s decision-making. This is because the foundation has independently created a unique structure where it holds no voting rights over the group. They sought a way to manage the company while guaranteeing its independence, ultimately delegating all voting rights of the shares held by the Bosch Foundation and some voting rights of shares held by Bosch descendants to the Bosch Trust.

Massive Dividends to Bosch Foundation → Spending 221.9 Billion KRW Annually on Social Contributions

Therefore, the Bosch Foundation has the right to receive dividends from Bosch GmbH but does not have the authority to participate in management decisions. Conversely, just as public interest corporations cannot interfere in corporate management, Bosch Group’s affiliates cannot exert influence over the public interest corporation.

The Bosch Foundation uses dividends to fund various charitable projects in education, research, and healthcare. It receives about 5-6% of the group’s net profit annually (approximately 149 million euros, about 221.9 billion KRW) as dividends. It supports patient treatment, biomedical research, and medical service improvements centered around the ‘Bosch Health Campus,’ and annually selects outstanding schools to award the German School Prize (with a prize of 100,000 euros).

Carlsberg, the 6th Largest Beer Seller Worldwide, Also Controlled by a Public Interest Corporation

Denmark’s beer company Carlsberg’s Carlsberg Foundation is another representative case that controls a company after receiving stock donations with tax benefits and actively engages in social contribution activities. Denmark also does not set a separate tax exemption range for stocks donated to public interest corporations. Carlsberg ranks sixth globally in beer sales, and the Carlsberg Foundation, a public interest corporation of the Carlsberg Group, owns 29% of the shares. Carlsberg controls Carlsberg Breweries A/S, which actually produces the beer.

Unlike the Bosch Foundation, the Carlsberg Foundation holds differential voting rights (77%) over Carlsberg and is known to exercise decisive influence over the group’s strategy through this.

Carlsberg Foundation Holds Group Voting Rights... Receives 219.2 Billion KRW in Dividends Annually

Like the Bosch Foundation, the Carlsberg Foundation conducts various social contribution activities based on dividend income from the group. In 2023, the Carlsberg Foundation received 1.1 billion Danish kroner (about 219.2 billion KRW) in dividends, which it distributes to other affiliated public interest foundations such as the Carlsberg Research Laboratory (8%) and the Tuborg Foundation (13%), with the remaining profits allocated to basic research support.

Based on stable funding, the Carlsberg Foundation is well known for sponsoring various fields. Carlsberg classifies the use of funds into categories A, B, C, and D and systematically allocates resources. Category A supports grants for research to develop the highest quality beer and provide global brewing models; Category B supports basic research in natural and social sciences such as quantum mechanics; Category C supports maintaining or developing the National History Museum to preserve historical heritage; and Category D supports youth civic organizations active in areas like the labor market and democracy.

The Carlsberg Foundation’s contributions to basic science are particularly well known. For example, the ‘Niels Bohr Institute for Theoretical Physics’ at the University of Copenhagen, where century-defining physicists such as Niels Bohr and Werner Heisenberg?Nobel laureates in physics for quantum mechanics in 1922?worked, has been fully supported by the Carlsberg Foundation. Additionally, the foundation has sponsored dozens of Nobel laureates in major scientific fields including chemistry, microbiology, and genetic engineering.

Support for the arts and culture is also notable. Carl Jacobsen, son of Carlsberg Group founder J.C. Jacobsen, operated the ‘New Carlsberg Foundation,’ which supported research fields through art donations to museums. Carl Jacobsen also operated the ‘Carlsberg Glyptotek Museum,’ which combines ancient art and his personal collection. The museum exhibits major works by artists representing modern art history such as Van Gogh, Gauguin, Rodin, Monet, and C?zanne, and has played a role in archiving Danish art.