Business is the most pervasive power on the globe today. Far beyond the power of individual governments, business is the transformational power.” So said Kevin Trapani, CEO of the Redwoods Group, at Duke’s Fuqua School of Business in 2011. For better or worse, he was right.
The naked pursuit of profit by global corporations may well be humanity’s undoing, but I’m not going to the dark side with this, and neither was Trapani. Rather, he was envisioning business as a force for good. A force, in fact, that can heal societies instead of corrupting them.
But that won’t happen unless business itself is transformed. Enter the movement known as B corporations. The “B”a different legal statusstands for benefit, not just to shareholders but to workers, communities and the environment, too.
Most corporations are organized in a way that treats the owners’ interests as paramount. B corporations redefine the purpose, putting social and environmental impacts on an equal footing with profits.
I came upon Trapani’s talk (it’s on YouTube) when I looked into B corporations in North Carolina. The movement is in its early days. We have just 30 B corps here, with a dozen other companies considering it. Redwoods, a Morrisville insurance firm with 80 employees and a client base of YMCAs and camps, is a sort of pied piper.
Beyond selling insurance, Redwoods was created with a social mission to help its customers serve children better, especially low-income children. One focus is preventing sexual abuse, a risk for any camp or YMCA where adults are in charge of kids.
I visited Redwoods to meet Christina Smith, a risk consultant whose passion is helping the B concept catch on. Smith is spearheading local efforts to build B-corp awareness, including trying to bring the movement’s national conference to the Triangle next October.
After we talked, Smith departed for this year’s conference in Portland, Oregon, where the official announcement will be made tonight about whether the Triangle gets next year’s gig. What are our chances?
You should mark your calendars, B fans.
Let me interject that I have not drunk the Kool-Aid. The B-corp idea is revolutionary. I get it. On the other hand, I’m sick of trying to keep track of all the companies to spurn (Walmart, Volkswagon, every oil company) because they pay crappy wages, pollute the planet or act like decency never occurred to them. I’d prefer a list of companies to like and buy from. Companies that, if I were younger, I’d be proud to work for.
That’s what the founders of B Lab, a California-based nonprofit, had in mind. Two of them, Jay Gilbert and Bart Houlihan, started a sports apparel company called AND1, which adhered to admirable practices until they sold it to a conglomerate that ditched their values for pure profit.
The B Lab founders aren’t saints. But they did put some of their fortune toward figuring out how companies could both remain good and stay in business.
That was in 2006. Today, the B-corp idea has three forms. One is legal; essentially, it means changing the corporate structure to include social goals as part of a company’s purpose. A second is legislation. Thus far, 31 states have laws recognizing the B-corp structure as valid, which is helpful should any disgruntled shareholders sue.
Not North Carolina, however.
The third form is certification by B Lab’s standards board that a company is indeed doing good. The process is akin to LEED certification for green buildings. The B-board examines pay and benefit practices. For example, how much more do executives make than workers? Are you using local suppliers and distributors? Are they energy-efficient, or don’t you know? What’s your carbon footprint? Do you share profits with community groups?
It’s a probing, detailed exam. Discriminatory practices are a disqualifier.
Certification is getting tougher as “best practices” are refined by a growing list of participating firms. B-cert this year does not guarantee B-cert next year. No company has ever achieved the top score of 200, or anything close to it. Perfection’s not the point. It’s whether you do enough good to get an 80. That’s the passing grade.
Did I say it’s early days? The number of certified companies is about 1,400, most of them small businesses, most in the United States, though 40 countries have at least one. Names you’ve heard: Patagonia, Ben & Jerry’s, Seventh Generation, Etsy.
Locally, they include such stalwarts as Larry’s Beans, the coffee company; Piedmont Fuels, which makes biodiesel from restaurant wastes; WasteZero Inc., a recycling firm; and Southern Energy Management Corp., big in solar power and energy efficiency. Or, for pasture-fed burgers and craft beer, there’s Bull City Burger and Brewery in Durham.
One hopeful sign is that the movement has backers in the business schools at Duke, UNC and NCSU. Look for them to be a factor whenI mean ifthe 2016 conference comes to town.
Christina Smith pointed me to an article on innovation in the Oxford Leadership Journal. “The world doesn’t change one person at a time,” authors Margaret Wheatley and Deborah Frieze wrote. “It changes as networks of relationships form among people who share a common cause and vision of what’s possible.”
This is not only possible. It’s necessary.
This article appeared in print with the headline “Do good to do well”