Let's make the world a better place. *Props to Urban Octopus for the artwork ^
Watch Benefit Corporations Aim to Make Profit, Positive Impact on PBS. See more from PBS NewsHour.
One of my favorite initiatives, B Corporation, and its backing non-profit B Lab, recently got national television publicity. On PBS Newshour last week, Paul Solman investigated the assessment firm (B Lab) that certifies companies as B Corps, which are businesses that walk the walk and talk the talk of social business innovation. What’s great about these B Corporations is that the social mission is directly integrated into the business plan and culture. Unlike some companies who have Corporate Social Responsibility divisions, B Corps companies are inherently socially responsible.
So why all the publicity now?
Last month, New York State followed six other states in creating a “Benefit Corporation” class, which grants specific legal rights to companies who benefit others in addition to its shareholders. This type of corporation exists in contrast to the standard corporation, whom is legally bound to maximize profit before all else. Benefit Corporations are now legally protected against shareholders who could sue on grounds that the corporation did not maximize profits (see Ben & Jerry’s or eBay v. Craigslist). As corporations and businesses look to achieve environmental and social profits, in addition to economic profits, this law presents a welcomed shift in the corporate law arena.
These are the states which passed laws providing a separate corporate class for Benefit Corporations: California, Hawaii, Virginia, Maryland, Vermont, New Jersey, and now New York.
Pennsylvania, Michigan, North Carolina, and Washington D.C. have legislation pending.
The new class of corporation is giving entrepreneurs the legal clout to sustain socially responsible businesses.
The challenge now will be to ensure the long term economic viability of these B corporations, whom still face stiff competition in the marketplace from traditional corporations.
The emergence of these new businesses and supporting legislation are steps in the right direction towards a better future.
Currently, there are 512 B Corps with nearly $3 Billion in revenue.
Learn more at: http://www.bcorporation.net/