B-Corps

benefit corporation is a class of corporation required by law to create general benefit for society as well as for shareholders. Benefit corporations must create a material positive impact on society, and consider how their decisions affect their employees, community, and the environment. Moreover, they must publicly report on their social and environmental performances using established third-party standards.

Benefit corporation laws address concerns held by entrepreneurs who wish to raise growth capital but fear losing control of the social or environmental mission of their business. In addition, the laws provide companies the ability to consider factors other than the highest purchase offer at the time of sale, in spite of the ruling on Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc. Chartering as a benefit corporation also allows companies to distinguish themselves as businesses with a social conscience, and as one that aspires to a standard they consider higher than mere profit-maximization for shareholders. 

So far, 8 states in the US have approved the B-corp legal status: Louisiana, California, Hawaii, Maryland, New Jersey, New York, Vermont, and Virginia.

So far, the United States boasts 533 certified B corporations across 60 industries. Combined, these responsible companies represent $3.11 billion in annual revenue and $2 million in annual savings.

B-Lab  is a non-profit organization “dedicated to using the power of business to solve social and environmental problems,” which provides third-party certification for aspiring B-corps. Its Declaration of Interdependence mission statement is as follows:

We envision a new sector of the economy which harnesses the power of private enterprise to create public benefit.This sector is comprised of a new type of corporation – the B Corporation –which is purpose-driven and creates benefit for all stakeholders, not just shareholders.

As members of this emerging sector, as entrepreneurs and investors in B Corporations, we hold these truths to be self-evident:

 That we must be the change we seek in the world.

That all business ought to be conducted as if people and place mattered.

That, through their products, practices, and profits, businesses should aspire to do no harm and benefit all.

To do so requires that we act with the understanding that we are each dependent upon another and thus responsible for each other and future generations.

From an article in The Nation

In their articles of incorporation, Benefit Corporations declare their public missions—things like bringing a local river back to life, providing affordable housing, facilitating animal adoptions or promoting adult literacy. Under the law they must go regularly before a third-party validator like B Lab, the visionary Philadelphia-based alliance of more than 400 so-called B Corps across the country, to prove that they are not only meeting their goals but treating their employees, customers, communities and local environments with the same respect as their shareholders

Some B Corps are even worker-owned, like Vermont’s famous King Arthur Flour, which has almost 200 employees and may become the poster child for companies doing well in commerce, doing good in society and doing justice in the workplace

_______________________

Buczynski, Beth. “Louisiana Becomes 8th State to Approve B-Corps” Shareable. 6 June 2012.

Raskin, Jamie. “The Rise of Benefit Corporations” The Nation. 8 June 2011.

Singh, Aman. “Dealing with Trust: Why the B-Corp Legislation Offers Business a Chance to be Good Again.” Forbes – The CSR Blog. 24 February 2012.

B-Corporation.Net, “Why B Corps Matter

Wikipedia, “Benefit corporation

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: