Hi, we're talking about first projects this week.
We stressed that the good first projects to be won and save money for the company.
The notion was that, this were the easiest to get approved, and
show that they were effective.
That the project really did what you said it would do.
Next week we talked about Financial Analysis.
These are tools to help you build a strong business case for your proposal.
It's all about money, money, money, you know.
We want to switch gears though, away from all this talk about money and profit and
introduce you to a different way of doing business.
The standard corporation operates under a huge casebook of laws and generally
business decisions are supposed to be made to increase the wealth of shareholders.
That means that profits drive decisions.
But this is starting to change.
We're lucky to have on our managing for sustainability MBA Program Advisory Board.
Kiera is the Community Development Manager for B Lab.
B Lab is the organization that certifies B Corporations.
Now, B Corporations are Benefit Corporations.
They can be set up to have a mission other than maximizing profits.
We talked to Kiera about B Corporations.
We hope you find this exciting because if you're thinking about starting a company
or you're working in a company with owners who share your values about people in
the planet, you should really consider shifting to the B corp model.
>> I am in charge of community growth.
And what that means is that we are really helping to spread the word and
support companies that again are using their businesses a force for good.
They're using B Labs tools to be impact assessment which is a free tool that over
40,000 companies around the world are now using to measure and
compare their social and environmental impacts.
And they're also moving on to join this community of leaders,
that community of certified B corporations.
One of the questions that comes up most commonly is whether companies
actually by law, have to maximize profits.
At the end of the day the answer is yes.
If you look at corporate law in the US we have seen time and
time again in courts of law that a company sole purpose actually is and
must be to maximize profits to shareholders.
This comes up most importantly at times of sale.
So what you'll see happen is that a company might go to sell and
have a few offers on the table.
And quite often the choice of the current ownership might be to
sell that company to a set of shareholders that have aligned values.
However, if that set of shareholders with aligned values is not bringing
the maximum price per share, they are actually going to be mandated.
If it makes it to a court of law to sell to a different bidder,
to the highest bidder,
regardless of whether that highest bidder aligns with the company's values or not.
And so, in fact it is incredibly important for companies to think about their
legal structure, as they are thinking about their long term commitment to
their broader set of stakeholders and not just their shareholders.
In order to address this challenge, along with a community of certified
B corporations, has actually been working to pass laws.
So, around the of the country there is now a corporate forum that is available in 31
states and the District of Columbia, including importantly Delaware,
as well as California and many other states that are common for
corporate incorporation, has passed laws allowing a new kind of corporate
structure called the Benefit Corporation.
Benefit Corporations are a type of corporation that is similar,
really identical to a traditional corporation in every other way,
except that it gives directors symbol of the right and the obligation to consider
other stakeholders other than just shareholders in their decision making.
So if we go back to our example, around the company that is going to sell,
that that company actually could make a decision to sell to a values aligned
investors or set of shareholders, instead of simply being forced,
essentially having their hands tied to sell to the highest bidder.
So, as companies are thinking about how to better take into consideration a broader
set of stakeholders, the question may arise, how can we actually measure that?
What is it we should be focusing on if it's not solely profits?
In order to address this challenge, which understandably can feel like a really
broad universe of different indicators, and projects, and
companies often times have trouble figuring out where to put their focus,
B Lab has worked to develop an assessment and it's called the B Impact Assessment.
It's a free online tool that any company around the world can use.
And this type of assessment is one of the ways that companies can actually go about
measuring their broader set of impacts.
So, if you're not thinking solely about measuring your profits,
it's incredibly important that companies are thinking about how to measure
their broader set of impacts.
And these impacts range from the way that employees are compensated
to the environmental impact that your supply chain has, and
really everything in between.
And those key performance indicators are very important for companies to think
about as they're thinking more broadly about that set of stakeholders.
As companies are trying to determine where they should focus,
it's very important that they reflect back on the company's core products, and
the company's core mission.
The universe of things that a company could think about in terms of maximizing
their positive impact on the world are incredibly broad.
In fact, with B Lab's assessment, there are over 200 possible points,
