In our last +1, we took a very quick, high-level look at the growing recognition of the fact that businesses can (and I’d say must!) be used as a force for good.
I mentioned The Economist cover story on what they call “Shareholder Capitalism” along with John Mackey’s debate with Milton Friedman (Rethinking the Social Responsibility of Business) plus his Conscious Capitalism movement and book. I also briefly mentioned another hero-friend Katherine Collins and the mutual funds she runs at Putnam.
Today I want to dive a little deeper into what it means to be a Public Benefit Corporation.
As we discussed, the sub-title to our session on “Prosper” was “An 80/20 Look at How to Invest in Optimus You, Public Benefit Corporation to Create a Heroic FIRE That Lights the World.”
So… I found it particularly awesome that The Economist actually referenced the growing number of Public Benefit Corporations in their cover stories.
In fact, they report that there are now 3,000 such Public Benefit Corporations in the world these days, certified by an organization called B-Lab.
We’re (very!) proud to be one of them: Heroic Enterprises, Public Benefit Corporation.
(Other great B Corps include Patagonia, Seventh Generation, and Method. Full directory here.)
What’s a “Public Benefit Corporation,” you ask?
Well…
Glad you asked. Here’s the short story.
A Public Benefit Corporation (or “B Corp”) for short, is, structurally-speaking, essentially, a standard “C Corporation” with one small but very important distinction.
As you may know (and one of the primary reasons why more and more people are getting tired of the current version of capitalism), from a purely legal perspective, the Board of Directors and CEO of a typical C Corp technically have ONE and only one fiduciary responsibility: to maximize shareholder value. (Aka: to make their investors a lot of money.)
Part of a longer chat, but… When that’s your only legal obligation, unfortunately (and obviously), it’s really easy to ignore some very important negative impacts of your feverish pursuit of profits at all costs.
Thankfully, many business leaders are committed to more than maximizing investor return but, what makes the idea of a B Corp so exciting is that the fiduciary responsibility of the Board/Executives of a Public Benefit Corporation include ALL (!!!) stakeholders—NOT just the investors.
What does that mean?
Well…
For example, it means that I, as the CEO of Heroic Enterprises, Public Benefit Corporation, have a FIDUCIARY responsibility to run our business thinking about how I can serve ALL of our stakeholders.
What’s a “stakeholder”?
Well…
John Mackey and Raj Sisodia talk about this in their book Conscious Capitalism. They even give us an acronym to make it easy to remember: SPICE.
Society
Partners
Investors
Customers
Employees
That commitment and (legal!) responsibility to serve all stakeholders is LITERALLY baked right into the corporate charter of every B Corp.
For example, our legal documents are pretty much identical to any other C Corp out there. Except for this fancy little paragraph:
“Without limiting the generality of the foregoing, this Corporation’s role in helping people optimize their lives may include, among other things, providing access to wisdom from optimal living teachers; creating an online community to engage with other individuals committed to making a positive difference in their communities; promoting other tools and services to help people be the change they want to see in the world; and optimizing this Corporation’s relationship to each of its stakeholders, including without limitation customers, employees, partners and society.”
(I actually get tears in my eyes re-reading that last line.)
That’s Today’s +1.
One more time: Let’s celebrate the fact that a lot of brilliant, purpose-driven, passionate humans are working hard to use business as a force for good.
And… Let’s join the party!!
Here’s to creating purpose-driven enterprises while voting with every dollar we spend (and invest!) as we go forward with hope, using business as a force for good.
