A new type of corporation has arisen in the form of the B Corp. The term can be used to refer to either Benefit Corporations, which are recognized under the benefit corporations laws of an increasing number of individual states, or Certified B Corps, which are certified by the 501(c)3 nonprofit B Lab. What all B Corps have in common is an emphasis on solving social and environmental problems through an increased emphasis on high standards of corporate purpose, accountability, and transparency.
Of course, that is a nice way of saying that shareholder profits take a back seat to these admirable objectives. However, B Corps are not just an idealistic dream of socially conscious aspiring entrepreneurs. Ben & Jerry’s recently became the first subsidiary of a publicly traded company to become a B Corp. The ice cream company has a notable history of social responsibility, of course, which led to firsthand experience with the conflict between shareholder interests and a socially conscious corporate platform. There was quite a controversy in 2000 when Unilever offered to buy Ben & Jerry’s, and the Board of Directors agreed, purportedly due to a fear of being held personally liable in litigation by shareholders who believed the sale was in their best interests.
While the acquired Ben & Jerry’s did not go on to become completely alienated from the social practices that defined it as many had feared, its new status as a certified B Corp assures its ability to take into account the interests of society and the environment alongside those of shareholders. It will be interesting to see what other types of corporations embrace this designation, and if it will properly safeguard their interests. While B Corps buck traditional conceptions of corporate values, they may also allow more small and socially-driven companies like Ben & Jerry’s to grow without losing the character that helped build their success.