Sustainability is permeating our business culture as well—the acceptable parameters of capitalism are shifting, causing corporations to evolve beyond a purely profit-driven model to one that incorporates social responsibility and environmental stewardship. Items that economists have traditionally described as “externalities” are now becoming central tenets of blended-values based decision making, enabling business leaders to define firm principles that contribute to the development and success of enduring corporations.
The concept of building community-oriented enduring corporations is not new, but the increasing pace and level of competitiveness in today’s global marketplace is compelling organizations to innovate and collaborate more than ever before in order to remain viable.
Rosabeth Moss Kanter, Professor of Business Administration at Harvard Business School says that “great companies identify something larger than transactions of business portfolios to provide purpose and meaning.” Business leaders can no longer focus solely on a single bottom line—they must build social institutions that appropriately respond to their communities and the environment.
Enter “For-Benefit” corporations: a rapidly growing class of organizations that have redefined fiduciary responsibility, governance, ownership, and stakeholder relationships so that they simultaneously and equally value social, environmental, and financial considerations. Through the creation of innovative legal and accounting practices, For-Benefit corporations are successfully able to achieve a triple-bottom line in a way that makes them not just viable, but increasingly competitive, in today’s economy.
Fortunately, For Benefit corporations aren’t just relegated to academic case studies and theoretical cocktail conversation anymore. Prominent (and profitable) corporations are taking the leap into the new business structure, including well known consumer products brands such as Seventh Generation, Method, and Dansko, as and some companies in our own industry, including Icestone, US Tile, Southern Energy Management, and Sun Light & Power.
Not surprisingly, Patagonia has jumped on the bandwagon and will become one of California’s first For Benefit Corporations. Yvon Chouinard, founder of Patagonia, says that “by turning the company into a For Benefit corporation, I can ensure the values of my company continue. I compare it to a conservation easement on a piece of property: It’s a conservation easement on my company.”
For more information about how you can differentiate your business by transforming it into a For Benefit corporation, visit http://www.bcorporation.net/.