Theodore Roosevelt once suggested “The best executive is the one who has sense enough to pick good men to do what he wants done, and self-restraint to keep from meddling with them while they do it.” Of course this quote should be updated to include good women to do what she wants done. The gist of the sentiment however, is a solid piece of advice for those who fashion themselves as a leader. And I have used this format to suggest that leadership in far too many companies that pride themselves in the products they produce or sell or service fall far short of doing what is right for their customers and the communities they might serve. The question is: How do businesses incorporated as a traditional C Corp enterprise adopt a B Corp mindset?
C Corp is shorthand for a process of categorizing a company based on how its taxes are assessed and paid. Wikipedia describes a “C corporation, under United States federal income tax law, refers to any corporation that is taxed separately from its owners.” This differs from S Corp status which taxes its owners. The vast majority of companies who incorporate chose this tax arrangement.
A B Corp according to Wikipedia is also known as “a benefit corporation is a type of for-profit corporate entity, authorized by 33 U.S. states and the District of Columbia that includes positive impact on society, workers, the community and the environment in addition to profit as its legally defined goals, in that the definition of “best interest of the corporation” is specified to include those impacts. Traditional C Corporation law does not specify the definition of “best interest of the corporation” which has led to profit motivations being used as the main driver for best interests.”
Both are for-profit. Both are responsible to investors, shareholders and stakeholders. Both are focused on financial success, most often in the long-term. Both types of corporations can express noteworthy concerns often making commitments to address their involvement in the community in which they operate. Both can have effective and inclusive leadership that inspires innovation. While C Corps tend to be older, this does not mean that they cannot achieve the successes needed to adopt a B Corp attitude.
The first step in the process of finding out where your company is in the journey is assessment. B Labs has built an impact assessment test that can help you understand how far you have come and have far you made need to go. The test, which was made more applicable to larger businesses examine your managers for social and environmental interaction, how well you treat your employees, the company’s use of renewable energy options and an overall application of Unesco’s Sustainable Development Guide.
The commitment to the SDGs is not an easy one. However, even if you pick and chose what would be most applicable to your current business, adopting the other basic tenets, by default, comes easier. So what are these SDGs?
Ending poverty is often treated as a political volleyball, the concept tossed between what is often described as socialism and on the other side of the net, welfare. It is neither and it is surprising how many businesses misunderstand the outcome if this SDG is achieved. More customers. It does not matter what business you are in, if someone cannot afford your products or services, you have not led your company on the right path. Your leadership is needed in more places than charity auctions or memberships on civic boards.
Zero Hunger is one of the most easily adoptable practices by those within the food industry. In every instance, food banks around the country are benefiting from the donations made by entities such as Walmart, Kroger and other major retailers. Even as they build efficiencies into their handling of the product they are donating, moving what was once a wasted opportunity to the right table remains a challenge in many parts of the country – and the world.
Within your facility, there is a great deal of opportunity.Companies have begun to make serious inroads into achieving a better workforce, a more engaged and committed staff because of changes in how you view their value. No longer a commodity, your people should feel included in the process.
I have mentioned on numerous posts that the key to leadership, as was mentioned in the Roosevelt quote at the beginning, is setting your agenda and letting your very smart people carry it forward. The atmosphere of dispensability that prevails at certain levels of the corporate structure, the feeling that missteps are a death sentence, is far too common. And that is unfortunate.
Many companies have taken a strong stand within their communities for a variety of reasons, most of which could be considered self-serving. This is an old school approach to a 21st century reality that this is a finite planet. How your company recycles is important and needs to be reexamined frequently. The innovation is growing quicker than corporate commitment and each day you support a supplier who is not using post consumer recyclable material in its packaging or not using the most efficient means of organic recovery or worse, failing to emphasize the need to continue to explore waste diversion methods, will leave your company less prosperous in the future. I understand the short-term goals that need to be met for your shareholders. I also understand your long-term commitments in your sustainability documents. As a leader, have you been able to marry the two? Are you simply following the local, state and federal guidelines or are you involved in the discussion? Are you making demands as a customer and in turn passing on those benefits one you begin to act as a supplier?
I suspect that you also live here. You also eat here. And your children and grandchildren. The final tenets of the guide are no-brainers. I should mention that I can help craft your own glide path to this kind of success – it is what I do (contact me here) – or you can attempt this complicated process on your own. Either way, the more you act like a B Corp, the better off we all will be.