I attended an interesting lunch yesterday on something called the B Corporation. It is an effort to formally write the idea of triple bottom line businesses into corporate law and provide the standards to go along with that. Today’s common form of organization is the C Corporation which has as its objectives to maximize shareholder value. The key measurement standard that goes along with that is GAAP accounting. B Corporations by contrast have a broader set of objectives that includes positive external impact and employee well-being.
What I love about this initiative is that it is an example of the kind of values based re-design that I believe we need. It is not an add-on or single product standard (eg fair trade coffee) but rather a comprehensive approach down to the legal foundations. You can already formally become a B Corporation in six states, including California as of a week ago. In New York the bill has been passed in both houses and awaits the signature of Governor Cuomo (if you happen to know him, please ask him to sign this!).
For venture backed companies it would be ideal to have Delaware also write the B Corporation into the law. That will likely take some time as Delaware is not an innovator when it comest to corporate law (they were the 22nd state to provide LCC laws). But in the meantime, you can already act like a B Corporation if that’s of interest to you and even be certified by B Labs (the non-profit behind the B Corporation). I encourage everyone to check it out. If nothing else, it will provide some interesting ideas for areas to pay attention to as a company. That is especially helpful for startups as it is much easier to bake sustainability, transparency, employee well-being into a company’s culture early on than add it later.
I was impressed by the people behind this effort who had successful careers in finance and became convinced that there had to be more than pure markets. The B Corporation could be the basis for a progressive form of capitalism and just the kind of thing we need. This might make a good subject for a teach in at Occupy Wall Street.