Many small corporations with a conscience, a so-called triple bottom line (profits, people and planet) get stripped of their conscience when bought out by a Big Corporation that’s only interested in short-term share-holder payout, and can be legally held to that goal. Writing in the NYTimes, Tina Rosenberg outlines a new type of corporate organization that can keep its conscience: the B Corp:
To become a certified B Corp, or benefit corporation, a business must pass an examination of how it treats its employees, the environment and the community. A non-profit organization called B Lab sets out the requirements and certifies businesses that meet the standard. The idea is that while any company can claim to be a good corporate citizen, a B Corp can prove it — something valuable for consumers and investors.
B Corps must also procure shareholders’ agreement for a revision of the bylaws to allow business decisions to consider the impact not only on shareholders, but also the workforce, community and the environment. Shareholders are allowed to sue if they feel the directors aren’t doing enough to take social responsibility into account.
The B Corp is backed in four states: Vermont, Maryland, New Jersey, and Virginia. Philadelphia gives tax breaks to B Corps. Currently there are 400 certified B Corps, but none that a publicly traded.