B Corps: Doing well while doing good.
Patagonia. Etsy. New Belgium Brewing Co. Klean Kanteen. Ben & Jerrys. Seventh Generation … The common thread? All are Certified B Corporations. “B Corps” are intent on ensuring profit is not the lone factor driving business decisions. Instead, these companies believe “people using business as a force for good” is the best way to achieve their business goals. B Corp certification is built on the idea that consumers care about the company, not just the product, when making a purchasing decision. But how exactly does a B Corp act as a “force for good” and how are they structured?
Maybe you’ve heard of a Benefit Corporation? The B Corp is the better-looking, more successful older brother. Despite its name, B Corp certification is available to all entity types, including LLCs, partnerships, corporations, and even sole proprietorships. B Corps are focused on three goals: (1) accountability, (2) transparency, and (3) social and environmental performance. B Corps excel in all areas of social change, environmental awareness, and community engagement. For example, in a typical for-profit corporation, your Board of Directors is charged with maximizing profits – that’s it. Compare to a B Corp, which empowers your Board to consider the best interests of the corporation as a whole, which includes all stakeholders: employees, customers, the environment and the community.
To receive B Corp certification, your business must pass a lengthy 2-4 hour “B Impact Assessment” given by the B Lab, a certified 501(c)(3). If your business receives a passing score, it could be eligible for actual B Corp certification. The certification process involves background checks, data verification, disclosure requirements and possibly on-site review. After your business passes the performance review, a legal review is necessary. This is where your lawyer comes in. She will need to ensure your corporate structure and governing documents align with the B Corp mission. Additionally, your lawyer will help your business navigate the requirements for your Board of Directors and your shareholders, and can additionally assist in amending your Articles if necessary to achieve the B Corp certification.
How much does it cost? Annual certification fees depend on the amount of generated revenue, ranging from $500 to $50,000. B Corps need to be recertified every two years.
It’s the best of both worlds – doing well while doing good. Hard to argue with that. Even for a lawyer.