When we reflect on the past year of a pandemic, social unrest, and climate change, we are reminded how society’s values are changing. During a year when we lived with more restraint than normal, support for the environment and social equality continued without wavering. What’s more, our expectations for businesses to do good expanded as we learned more about how traditional corporate governance does not cover all the responsibilities that businesses have. The nation is facing a reappraisal of the role and purpose of business in our lives. American society protects its common values through laws and governance. But the governance of for-profit corporations normally require little more than a responsibility to shareholder profits. Wouldn’t it be nice if American businesses reflected values that go beyond profits to encompass the values we see so much public advocacy for today?
Public Benefit Corporations
It’s true that many companies voluntarily step up to the call for more inclusive and participatory governance, protection of the environment, and contributions to the well-being of stakeholders in the communities they serve, etc., but for us consumers it can be hard to tell whether their proclamations are a true corporate culture shift or if it’s mostly greenwashing. Then there are companies who take their role in society seriously. These companies take legal steps to become benefit corporations. For-profit benefit corporations have been around since 2010. The incorporation documents of benefit corporations require them to act both in the interest of shareholders and to consider their mission such as the environment and social justice.
This is important because these are some of the first recognitions of the environment, the community, and employees as stakeholders in a business. Today, at least 37 states have public benefit corporation statutes. There is no federal law for shifting the culture of business yet, but states often take the lead in a culture shift. According to the American Bar Association more than 3,600 public benefit corporations have been formed. Major brand names like Kickstarter, Patagonia, Etsy, Unilever, Danone North America, King Arthur’s Flour, and Campbell Soup are all public benefit corporations. Ampion became a benefit corporation in 2020 to support a purpose-driven economy that considers the impact on all stakeholders — communities, workers, customers, the environment, as well as shareholders. Ampion’s CEO Nate Owen says, “Our success is defined by how well we serve the greater good, not just the profits we earn.” Ampion’s commitment to do well by doing good is official and legally binding. In a society where socially responsible companies create a sustainable economy that works better for all, the values of all stakeholders are represented. This is called stakeholder capitalism.
Stakeholder Capitalism Trends
Trends show that stakeholder capitalism is firmly in place today.
Stephen Hahn-Griffiths, chief reputation officer of the Reputation Institute, a reputation measurement and management services firm, said “Corporate responsibility is no longer optional—it is critical for any business.” The fact is, that businesses who use purpose to create deeper connections with consumers, do more for the communities with which they work, and attract and retain talent are the companies that achieve both greater results and greater impact, according to Deloitte Insights research. If current trends continue, benefit corporations may well become so numerous that they will have significant power to help solve social and environmental problems.
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