Corporations. Don’t you shudder just a little when you hear that word? It seems the big, bad corporations of our time have given all corporations a bad rap by evading taxes, underpaying employees, overpaying CEOs, and buying political candidates. And, of course, it is quite problematic that the modern form of corporation’s raison d’être is to make money for its shareholders—at all costs. (Which is why we shudder.) But that doesn’t mean there aren’t plenty of people out there wanting to make the world just a little bit better and make a living at the same time. That’s really the ideal scenario, isn’t it?
In my wellness utopia, I talk about establishing social businesses and worker cooperatives as standard business types. Nobel Laureate Muhammad Yunus invented the social business concept as a means to create businesses for a cause. Social businesses’ primary goal is not to make money. Rather, they are designed to make the world a better place. Profits do not go to shareholders, but rather back into the business. Investors do get their money back, but not with interest (so kind of like lending money on Kiva). (Worker cooperatives, of course, is a model where all employers are equal owners of the business and every person has one vote. It is a democratic workplace and everybody is paid their fair share.)
I’ve been talking to people about the social business concept for years, lamenting that it is not a legal business type in the United States, and brainstorming ideas, should I want to start one some day. Well, my friends, I have good news. It’s not exactly like a social business, but as of this writing, 24 states have passed laws to establish a new kind of corporation—a corporation to add benefit to society and the planet: a benefit corporation!
Here’s what makes benefit corporations different (from the Benefit Corporation website):
- Benefit corporations have a corporate purpose to create a material positive impact on society and the environment.
- Benefit corporations are required to consider the impact of their decisions not only on shareholders but also on workers, community, and the environment.
- Benefit corporations are required to make available to the public an annual benefit report that assesses their overall social and environmental performance against a third party standard.
This is huge! Entrepreneurs who want to do big things to benefit society now have an actual legal framework in which to operate. They no longer have to worry about the ramifications of making decisions for the good of society and the environment above the good of the bottom line and their shareholders.
I (and many others) have high hopes that this will be the primary type of corporation in the future. Really, it makes no sense for us as global citizens to allow our traditional type of corporation to continue to exist (at least not without major corporate law reform). Corporations should serve society, not the other way around.
Here’s how you can support the cause:
- Find out if your state has already passed laws in favor of benefit corporations (see list). If yes, figure out if the business you work for or own could be a benefit corporation. If not, let your representatives know that you think it’s a good idea (14 additional states are already working on such laws).
- Support benefit corporations and other businesses known for doing good things in this world. This could be through investments or simply by choosing to make your purchases with these businesses over big, multinational corporations.
Over to You
What do you think? Are benefit corporations the wave of the future?