B Lab is Reforming Capitalism with Benefit Corporation Governance

B Lab is a non-profit that sees business as a force for good. They oversee both Benefit Corps and B Corps. They have a vision of an inclusive and sustainable economy that creates shared value for all. They seek to replace the maximization of profit and shareholder primacy with the maximization of benefit for all people and the planet. This is a business model designed to serve the public good through legal structures, performance standards, and transparency. This humanity-focused approach considers the impact of their decisions on all stakeholders including shareholders, workers, customers, suppliers, communities, and the environment.

In a Reuters article, Lin Taylor describes the objective of Benefit Corporations as an effort to “dismantle a ‘greed is good culture and inject compassion into the global free-market system”. As explained in a Forbes article by Jay Coen Gilbert, the co-founder of B Lab and the movement of Certified B Corporations, the leaders of this emerging economy believe:

“That we must be the change we seek in the world; That all business ought to be conducted as if people and place mattered; That, through their products, practices, and profits, businesses should aspire to do no harm and benefit all. To do so requires that we act with the understanding that we are each dependent upon another and thus responsible for each other and future generations.”

Benefit corporation governance strives to align businesses with the interests of society. Companies that adopt such governance are held legally accountable in their efforts to serve the public. This approach has earned the support of politicians from both ends of the political spectrum. Mike Pence along with 16 other Republican governors passed corporate governance legislation. In 2018 Senator Elizabeth Warren introduced the Accountable Capitalism Act that mandated benefit corporation governance for large corporations.

This is a large and growing movement. There are now more than 8,000 businesses that have adopted benefit corporation governance and 2,700 companies in 150 industries are Certified B Corporations. A total of 34 states and two countries have passed corporate governance legislation and other countries are reviewing similar laws.