Readers of this blog may know that one of our companies is a charter B-Corporation. You can read more about B-Corporations here. B-Corp’s are companies that desire a broader mandate than simply “maximizing shareholder wealth.”
In many states, if a corporate board or officer strays from the task of maximizing shareholder wealth, they could be tried for violating the law. B-Corporations view their responsibility to all stakeholders, not just shareholders. These stakeholders include employees, vendors, and their local community and environment. The B-Corp concept is sometimes referred to as the Triple Bottom Line: people, planet, profits. Some of us also refer to this business model as missional.
Not long ago, a number of us were active in the first steps towards changing California corporate law to legalize B-Corp-type entities, via Assembly Bill AB2944. The bill passed both the California Senate and Assembly, but due to a technicality was veto’ed by Governor Schwarzenegger. The Governor himself has requested specific changes to the legislation and 2009 should be the year California approves B-Corp-style corporations.
B-Corp leaders recently had two meetings with the Obama-Biden transition team. A report on those meetings can be found here. This morning I received an update from Chrissy at B-Corp (whose dad started this whole idea) and I wanted to pass along some of the latest news.
Ben Cohen (Ben & Jerry’s Ice Cream) calls on Investors Circle community to ‘Implement B Corp’
At the last IC meeting, in his plenary panel presentation on ‘Responding to the Financial Crisis’, Cohen called for investors and the companies they support to implement the B Corporation legal framework to protect their ability to consider the impact of their decisions not only on short term financial value, but long term social value. Cohen also noted importance of transparent, comparable, and comprehensive standards and ratings to drive and reward social and environmental performance.
Canadian Supreme Court Clears the Way for B Corps
In an overruling of Revlon, according to the Canadian Supreme Court, the obligation of a company to act with a view to “the best interests of the corporation” requires directors to consider the interests of all stakeholders, and not to equate the interests of the corporation with the interests of shareholders alone. In the Court’s words:
“[T]he duty of the directors to act in the best interests of the corporation comprehends a duty to treat individual stakeholders affected by corporate actions equitably and fairly. There are no absolute rules. In each case, the question is whether, in all the circumstances, the directors acted in the best interests of the corporation, having regard to all relevant considerations, including, but not confined to, the need to treat affected stakeholders in a fair manner, commensurate with the corporation’s duties as a responsible corporate citizen.”
Notes from Investors Circle Conference
In addition to Ben Cohen’s remarks, in her keynote address, Majora Carter fromSustainable South Bronx said that when SSB creates its for-profit subsidiary, it will be a B Corporation. Mission Markets may also use B Ratings System as listing requirement for new private equity social stock exchange. Click on link for more:
Champions tell B Corp story at SVN
Over a dozen B Corp SVN members carried the energy from the Champions Retreat through SVN, introducing many new companies to B Corp and incorporating B Corp into their booth displays (Trillium, Impact Makers).
GOOD Business Lounge debuts at SF Green Festival
20 Certified B Corporations were showcased to 40,000 green consumers and hundreds of leading green businesses. Copies of the premier issue of GOOD Business were distributed and GOOD Business videos of Comet Skateboards, Icestone, and Greyston Bakery were running all weekend.
Net Impact Conference highlights B Corps (x2)
In separate panels, Bart Houlahan and Jay Coen Gilbert shared the B Corp story with hundreds of aspiring social entrepreneurs. B Corporations were represented on other panels as well: Mike Hannigan (Give Something Back), David Murphy (Better World Books), Judy Wicks (White Dog CafÃ©).
UNC Kenan-Flager B-School hosts B Corp Party with a Purpose in North Carolina
50 local business leaders gathered to hear local B Corp CEO Eric Henry from TS Designs and Bart Houlahan share the B Corp story.
At GreenBuild ’08, Michael Whelchel of Watershed Capital and Peter Strugatz of IceStone spoke to a capacity crowd of 400+. They led a panel entitled “Growing the Green Business”. It was one of the few breakout sessions of the over 100 offered that focused on triple bottom line companies. Both Watershed Capital and IceStone were presented as founding B Corp members. Michael Whelchel of Watershed Capital highlighted B Corporation by showing the B Corp Founders Video which received spontaneous applause after its showing.
Young Presidents Organization (YPO)
B Champion Jim Kenefick from BetterWorld Telecom, arranged for us to give a presentation to the YPO-WPO Corporate Responsibility Network. Organizations run by YPO members account for an estimated 10% of the economy. Hear the podcast here.
B Corporations are a new type of company which uses the power of business to solve social and environmental problems. In just over a year, there are already over 140 Certified B Corporations, from over 30 diverse industries, representing $1B in collective revenues and $6B in capital under management.