Good Corp, B Corp
I know what you are thinking – what a fabulous title but what is a B Corp? In short a B Corp is a company accreditation for corporations and business which are electing to commit to a higher set of standards from a societal and environmental basis. Achieving this by being more transparent and introducing legal accountability to the business which puts profit and purpose on the same pedestal.
The B Corporation Movement is an accredited system with one unifying goal – which is making social responsibility a core tenet of business. Accreditation can be obtained by any business with over 150,000 businesses worldwide currently at some stage in the process; from assessing themselves, taking actions to manage and improve their performance and fully accredited businesses.
This movement has aligned to a growing societal movement for a number of businesses, business people and people in general towards caring about the Earth and ensuring that future generations have the best societal and landscape possible. The B Corp movement is thus the next step for businesses, and businesses leaders, in leading towards ethical business.
The process to achieving accreditation is one which begins with a self-assessment. The assessment can be found here. The focus of this is for businesses to identify how they handle their output from a social and environmental perspective. As part of this all businesses will identify weaknesses or areas where improvement can be sought. By carrying out the assessment a business can measure the impact it has and how its’ business performs against the targets that a B Corp is striving to hit.
Once a business has assessed where they are at and where they need to go they will be able to identify the big areas of weakness and where they can improve their positive output to society and the environment. From this stage, it is about making the minor, or even major, changes that can produce more positive changes to society.
Once a business has assessed itself against the standards outlined to become a B Corp and subsequently made the changes required to ensure that society and the environment are part of the businesses core beliefs they will need to go through the certification process. This will involve communication with the B Corp and a formal assessment where a business will need to demonstrate that they are accountable, transparent and meet the high standards expected of the B Corp movement.
If a company meets the minimum required score as part of the assessment, being 80, they will still need to ensure that they have met some specific legal requirements. In England and Wales any limited company which wants to become a B Corp will need to have a compliant set of Articles of Association.
The Articles of Association (Articles) of a limited company act as that company’s constitution which sets out the rules and priorities of the organisation. In a standard set of articles, notably the Model Articles. The priority of the business is promoting the success of the business, and in particular the company’s members. Those members are the shareholders of the business and the standard expected, generally speaking, for promoting this success is measured by profit.
As mentioned earlier the purpose of a B Corp is contrary and against this thought process. Rather than being profit driven a B Corp equates profit on the same level of importance as promoting the success of society and the environment. As such any company in England and Wales which is looking to become B Corp accredited will need to have an amended set of Articles which state, explicitly, these equal standards.
The effect of the Articles, in their amended form, equating profit with society and the environment is binding the directors to assess the impacts of decisions from all three perspectives equally. If something is profitable but damages the environment (i.e. dumping sewage in a river) and a director elects to do that in a B Corp they will not be deemed to be promoting the success of the business and thus acting against its own constitution.
If you are in the process of seeking your own B Corp accreditation and are looking to ensure that you articles are compliant with the B Corp standards please get in touch by telephone to 01273 447 065 or by clicking here to fill out an enquiry form.
