Chapter 9: Paint Your Environment Part 9
The last few posts have explained how a “numbers first” corporate culture is more likely to lead to corporate idolatry. There are also corporate cultures that are less likely to contribute to corporate idolatry. One of them derives from a fundamental way that a corporation is structured.
Remember from Chapter 3 that corporations are established by law? Under the standard legal framework, company officers and employees have a fiduciary duty to maximize shareholder value, and may actually be prohibited from taking wider social concerns into account when making decisions if shareholder value is negatively impacted.
For example, it is widely perceived that the formerly socially progressive Ben & Jerry’s Ice Cream Company was forced to sell to Unilever, a large multi-national company because it was in the best interest of shareholders. A close review of this decision debunks the myth that the company was legally required to sell to the highest bidder even though the founders did not want to sell.[i] But whatever the actual legal status, this perceived fiduciary duty is an argument that can thwart attempt to “do the right thing.”
The Benefit Corporation (B Corporation.) is a new type of corporation designed to get around this issue. According to Bcorporation.net, “Current corporate law makes it difficult for businesses to take employee, community, and environmental interests into consideration when making decisions.” The B Corporation provides a legal framework to allow the creation of an organization that has a wider social mission beyond profit alone. In other words, the founding charter of a B Corporation includes a material benefit to society as one of it’s goals.
According to Andrew Kassoy, one of the leaders of the B Corporation movement, “Increasingly there are businesses that want to create value for all their stakeholders, not just their shareholders.” [ii] So by it’s very nature, a B Corporation, will tend to attract people who care more about than just the bottom line. This type of environment is much more likely to be friendly to a balanced lifestyle. For example, Patagonia, a B Corporation, is highly rated on Glassdoor.com, both overall and for work/life balance.
Will a legal structure solve the problem of corporate idolatry? Not completely, but a B Corporation could be part of your answer, because it removes an obstacle to people-first values in the workplace.
What do you think?
[i] Freezing Out Ben & Jerry: Corporate Law and the Sale Of a Social Enterprise Icon By Antony Page & Robert A. Katz. Stanford Social Innovation Review Fall 2012, retrieved January 21, 2013 http://www.ssireview.org/articles/entry/the_truth_about_ben_and_jerrys
[ii] Socially Conscious Companies Have a New Yardstick By Hilary Howard. New York Times. Published: November 8, 2012, retrieved January 21, 2013. http://www.nytimes.com/2012/11/09/giving/a-new-yardstick-for-socially-conscious-companies.html?pagewanted=all&_r=0
Image courtesy of B lab.