Triple TOP Liners: Benefit Corporations

The Triple Bottom Line (TBL) is a well recognised approach to incorporating social and environmental aspects within the formal decisions making routines of companies. It gives social, environmental and economic aspects of performance an equal status on the bottom line of a company in recognition of the fact that if society and the natural environment suffer adversely, then so do companies.

The problem with TBL is that economics still sits imperiously alone on the top line. Core business and economic values are not challenged with a TBL which means that only economic goals are pursued with vigour whilst the social and environmental impacts are cast as either obstacles and additional costs to be overcome, or ideals to be pursued only if the real business of economics can find the time and resources.

Whilst a TBL is better for the world than purely economic forms of accounting and goal setting, it is an unsatisfactory compromise. For PR, the TBL is a hybrid of two epistemes, the Modern and the Primal (Birkin & Polesie 2011). Since the Modern possibility of knowledge is now being replaced by the Primal, should this not enable a deep rethinking of the fundamentals of corporate performance appraisal and goal setting?

Indeed it should, and it does. As the self-referencing abstractions of Modernity in the human sciences are replaced by knowledge derived from empirically-grounded science of the Primal age, we are can envision corporations in simple, new and totally changed ways. The Modern corporation is a discrete entity seeking power and growth according to its own definitions of its economic self: the Primal organisation on the other hand is a part of a network of relations many of which need to be acknowledge and acted upon for all practical business purpose. The Primal organisation is not an economic entity trying to tread lightly on social and environmental concerns (as in the TBL) but is reconstituted as an economic/social/environmental entity seeking a harmonious balance between a range of equally valid alternatives.

In this way a Primal corporation refines success. A Primal corporation strives to be not the best in the world but the best for the world….. which is precisely the goal of a Benefit Corporation.

In the USA, Benefit Corporations are emerging to change the business world. They are a new class of corporation that:

1) creates a material positive impact on society and the environment;

2) expands fiduciary duty to require consideration of non-financial interests when making decisions; and

3) reports on its overall social and environmental performance using recognized third party standards.

But most significantly, Benefit Corp. status relieves a corporation of its obligation to maximise shareholder profit – this is why PR argues that they are becoming true Triple Top Liners (TTL). (Under current US law, shareholders can sue corporate boards for not maximizing profits.)

Since 2010, Benefit Corporation legislation has been enacted in 12 states, and is under consideration in twenty more. Make no mistake about it, B-Corps are revolutionary and they have their own Declaration of Independence.

B Corps Declaration of Independence

The California outdoor equipment and clothing manufacturer Patagonia is a registered Benefit Corporation.

“Patagonia is trying to build a company that could last 100 years. Benefit corporation legislation creates the legal framework to enable mission-driven companies like Patagonia to stay mission-driven through succession, capital raises, and even changes in ownership, by institutionalizing the values,culture, processes, and high standards put in place by founding entrepreneurs.” 

so says  Patagonia founder Yvon Chouinard.

Benefit Corporations in themselves may not be enough to bring about a sustainable world 

– but they are BIG step in the right direction.

B the CHANGE

References
Birkin, F.K. & Polesie, T. (2011). Intrinsic Sustainable Development: epistemes, science, business and sustainability. Singapore, World Scientific Publishing.