Scarcely a day goes by without another revelation of bad behaviour in the boardroom and evidence that winner-take-all capitalism creates some very negative activities. Here are three random picks from the wealth of skulduggery that showed up in 2011:
- Rupert Murdoch’s News of the World tabloid was caught hacking into the phones of a murder victim, the families of dead soldiers, and various celebrities;
- To cut costs, the French company Poly Implant Prothèse used sub-standard silicon in the breast implants it manufactured, possibly putting the health of tens of thousands of women at risk;
- The bankrupt U.S. brokerage house MF Global was, in the words of the Wall Street Journal, “undone by a huge bet by [CEO Jon] Corzine on European sovereign bonds that was part of his ambition to transform a sleepy commodities broker into a Goldman-like investment-banking powerhouse.”
Corporate Misbehaviour not Uncommon
It would be nice to report that the above examples of corporate wrongdoing were isolated cases; sadly, they are not.
As reported by Jamie Raskin in The Nation (June 2011) “far from advancing the common good, many for-profit corporations have come to defy the law, corrupt the officials charged with enforcing it and inflict harm on the public with impunity…Profits rule; anything goes.”
The Benefit Corporation movement hopes to put an end to that.
Benefit Corporations State their Social Goals
B Corps, as they are known, are in the business of making profits but they add a public mission to their activities. Jamie Raskin writes that these added dimensions might be “bringing a local river back to life, providing affordable housing, facilitating animal adoptions or promoting adult literacy.”
However, the deal goes further than the pious statements about social responsibilities and good environmental stewardship put out by many corporate public relations departments and then ignored. B Corps have to prove to a third party that they are meeting their stated goals in order to keep their certification and display the organization’s logo – a letter B in a circle, similar to the copyright symbol.
Meeting the Challenge of the Public Good
One third party is B Lab. One of its co-founders, Jay Coen Gilbert, says the concept of the group is “business being used as a force for good.”
And, the organization’s vision is, “to create a new sector of the economy which uses the power of business to solve social and environmental problems. This sector will be comprised of a new type of corporation - the B Corporation - that meets rigorous and independent standards of social and environmental performance, accountability, and transparency.”
Establishing B Corps would go a long way to meeting some of the frustrations of the general public that found expression in the “Occupy” movement.
Examples of B. Corps
At the start of 2012, 502 companies had been designated as B Corps, representing $2.5 billion in annual revenues. Most are in the United States, with 28 in Canada, and one in Germany. This is a miniscule fraction of a global economy that is valued at somewhere between $60 and $70 trillion, but it’s only a fledgling movement.
A typical example of a B Corp is King Arthur Flour of Norwich, Vermont. The company has been around since 1790 and is now owned entirely by its 200 employees. It is involved in recycling and community development projects and gives employees “forty hours of paid time to help any non-profit organization that they choose.”
Enviro-Stewards of Elmira, Ontario, Canada says its mandate is “to help our clients conserve their resources and effectively address their environmental liabilities.” Staff is encouraged to get involved in local charitable work and “to help launch sustainable income generating projects in the developing world.”
Noticeably absent among businesses with B Corp certification are any members of the Fortune 500 club or other large publicly traded corporations. Perhaps, they will get on board when consumers start asking to see the B Corp logo on products and services they use.
Sources
- “Quick Guide to News Corp Hacking Scandal.” Paul Sandle, Reuters, July 18, 2011.
- “Health Fears Over Suspect French Breast Implants Spread Abroad.” Maïa de la Baume and David Jolly, New York Times, December 21, 2011.
- “The Unravelling of MF Global.” Aaron Lucchetti and Mike Spector, Wall Street Journal, December 31, 2011.
- “The Rise of Benefit Corporation.” Jamie Raskin, The Nation, June 8, 2011.
Rupert Taylor - Rupert Taylor is the editor of a magazine that provides background to current events.
Join the Conversation