In the last few years a new type of business corporation has appeared — the benefit corporation. The Wikipedia definition begins with,
A benefit corporation or B corporation is a corporate form in the United States designed for for-profit entities that want to consider society and the environment in addition to profit in their decision making process.
- have a corporate purpose to create a material positive impact on society and the environment;
- are required to consider the impact of their decisions not only on shareholders but also on workers, community, and the environment; and
- are required to make available to the public an annual benefit report that assesses their overall social and environmental performance against a third party standard.
I like item 2. It seems to me that in addition to a responsibility to its shareholders, a corporation has a responsibility to its customers, employees, and society. Here is a partial list of Benefit corporations. Patagonia, Inc. is notable in this list.
Benefit corporations may, if they choose, become certified B Corps. In 2010, Maryland was the first state to officially recognize B Corps as a distinct legal entity. Last July, Delaware joined 13 other states that recognize the B Corp. B Corps must be certified by B Lab, an independent organization. According to Benefit Corp vs. Certified B Corp,
A certified B Corporation has achieved a verified minimum score on the B Impact Assessment (80/200). While benefit corporations are required to publish an annual report assessing their overall social and environmental performance against a third party standard, that report is not required to be verified, certified, or audited by a third party standard organization. . . . Certified B Corporations have been certified as having met a high standard of overall social and environmental performance, and as a result have access to a portfolio of services and support that benefit corporations do not.
B Lab’s website, in Why B Corps Matter, states
Business, the most powerful man-made force on the planet, must create value for society, not just shareholders.
The Benefit Corporation is an interesting concept. Will it endure, or become just a footnote in the long history of business and commerce?
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© Russ Bellew · Fort Lauderdale, Florida, USA · phone 954 873-4695