Monday, August 3, 2009

Do you work for a B Corporation?

Last week, I tried to illustrate why interest in Corporate Social responsibility (CSR) is spreading. I also provided examples of initiatives in both large and small companies, here in the US and in Europe. I could also have given examples from a host of other countries on all five continents. So, I believe a new model of socially-strategic leadership is already working and gaining wide-spread acceptance.

In physics we know that many seemingly opposite things can be true at the same time. Light can be both a particle and a wave. We can be sitting in a chair, sure we’re not moving, yet be on a planet moving through space at 67,000 miles an hour. Once we become open to a “Both + And” world view, we can begin to see problems as opportunities. "Both + And" thinking pushes our imaginations to a higher level and lets us live our whole dream rather than a fraction of it. "Either - Or" thinking boxes us into making small, limiting choices instead of big, liberating ones. The CSR philosophy is grounded in providing "Both + And" leadership which seeks to jointly optimize many requirements at the same time in a complimentary way.

While a company can easily claim to be following CSR practices, rather like what's happening with the current organic food movement, how do you know which are for real and which are just continuing with old practices but calling them by new names? One way in the US is to look for businesses that have been certified as B Corporations (B as in “for benefit” to society). This certifies to a consumer or investor that they’ve chosen a company that's passed a certain threshold of social responsibility. Becoming a B Corporation involves changing a company's bylaws to pledge consideration of wider stakeholder interests. Changes in the company charter however are only part of the story, according to Andrew Kassoy, cofounder of B Lab, the Berwyn, Pa., nonprofit group that certifies B Corporations. That’s because B Corporations must also continually earn high marks on a social responsibility scorecard to qualify for certification.

The three-year-old B Corporation movement began when Mr. Kassoy and two former classmates at Stanford University formed B Lab to encourage alternatives to what they call “short-termism” – a tunnel-vision focus on generating quick returns for shareholders. Currently, there are 200 B corporations from 31 industries with over $900 million in sales. This is expected to grow to more than 300 companies by the end of 2009.

Benefits - brands a company as a business with sustainable values
- links like-minded companies together who have the same practices.
For instance, all B Corporations save as much as 80% on software that helps them manage customer service.

Shareholders might argue that they, as owners, have a right to top stakeholder status under the definition of a corporation and seek damages if a company seems to give preference to another group’s interests. To date, such legal questions remain largely in the realm of speculation since no B Corporation has faced a lawsuit challenging its charter. In California, a working group of corporate lawyers has been developing a bill that would create a new legal structure for companies eager to embrace broad social commitments without fear of recourse from disgruntled shareholders, says Susan Mac Cormac, a partner in the corporate law group at Morrison & Foerster in San Francisco.

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