B Corporations and the future of business
In one of those coincidences that makes a great excuse for a blog entry, I have twice in less than a week read about an interesting new kind of corporation, designed to make business more environmentally aware.
The first mention was in Daniel Pink’s Drive, where the author describes the B Corporation, along with L3Cs (low-profit limited liability corporations) and the “social businesses” of Muhammad Yunus, as structures that serve a larger social mission than making money.
Corporations, it has been often argued, have no business performing charitable acts. Their duty – moral as well as financial – is to maximize profits for their shareholders, not to do good deeds, even if those acts enhance their images.
As the website bcorporation.net states,
- Current corporate law makes it difficult for businesses to take employee, community, and environmental interests into consideration when making decisions
- The lack of transparent standards makes it difficult to tell the difference between a ‘good company’ and just good marketing
That’s where the B corporation comes in. By stipulating “comprehensive and transparent social and environmental performance standards” and “higher legal accountability standards,” B corporations replace profit-maximization with a combination of profit and social benefit.
An intriguing idea for the new economy.