B Corp - Is this the organisation of change?
So what is a business? It is about making money? Is it about serving customers? Is it about serving owners or in this current world, shareholders? The goal of a business is to create profits for its owners. The goal of profit maximization is very clear in that sense from an economics point of view. What is not clear is whether that should be the purpose of a business.
When you move to the world of social change, we have charities, not for profits and now social enterprises. My learning from the time of Deeshaa to now in TACSI is clear that social change requires hybrid thinking and business models are the key to sustainable social change.
The B Corp is a radical idea to create a law where the corporation should move away from profit maximization.
B Lab Cofounders Jay Coen Gilbert (on left), Bart Houlahan and Andrew Kassoy in Forbes
With Delaware Governor Jack Markell signing benefit corporation legislation into law, business leaders have a new freedom to make decisions that are in the best interests of society as well as their bottom line, and we — as citizens, customers, workers, and investors — have the tools to identify and support them.
Until recently, corporate law has not recognized the legitimacy of any corporate purpose other than maximizing profits. That old conception of the role of business in society is at best limiting, and at worst destructive.
The benefit corporation legal structure is a new and useful tool for everyone. For policy makers and the public interest, it combats the plague of short termism. For business leaders, it helps attract the best talent and turn customers into evangelists. For customers, it offers greater transparency to protect against pretenders. For employees, it promises higher quality jobs where they can bring their whole selves to work every day. And for investors, it mitigates risk, reduces transaction costs, creates additional rights to hold management accountable, and accelerates the growth of a big market opportunity to meet the needs of people who want to invest to both make money and make a difference.
The most exciting thing about b-corp is the idea that business is a power of good in the end and that we should be using business thinking, frameworks and even structures to solve social and environmental problems. Exactly what I believe in. The b-corp puts all of this in a legitimate package that makes this a legal pursuit. So why is this important?
The b-corp says for two reasons. Transparency and investment. Transparency provides the legitimacy that is required to differentiate yourself and that attracts new investment, impact investment and other kinds of investment. This is the key differentiation.
This is going global from the US and in Australia Small Giants in the first B-corp certified organisation. They are partnering with b-corp in the US and brining it to down under in December 2013.
I will be closely following this.