This afternoon, I listened in on the B Corp quarterly update call. Almost two years ago, Atayne became a certified B Corporation. Unlike traditional corporations, Certified B Corporations are legally required to consider the impact of their decisions on the long-term interests of their employees, suppliers, community, consumers, and the environment. The ultimate goal of the certifying organization, B Lab, is to create a new, legally recognized corporate form (like a C-Corp or S-Corp) with tax incentives, procurement preferences, and a social stock exchange for sustainable businesses.
There is a lot of exciting activity going on with B Corps. There are currently 314 certified B Corps across 54 industries. These companies employ over 6,000 people and sell products and services that make up a $1.5 billion marketplace. And it is not just a bunch of mom and pop operations. There are many well-known and established companies such as Seventh Generation, dansko, method, BetterWorld Books, and King Arthur Flour.
Additionally, over the last 6 months, B Lab made some great progress on their policy and legal initiatives. On April 13, 2010 Maryland signed the nation’s first Benefit Corporation legislation. This was followed shortly by Vermont. As they proudly like to say, 2 down, 48 to go.
As I listened about all this positive activity around companies that are committed to more than just their shareholders, I started to think about an interview I recently read on Grist.
The interview was with Peter S. Kaufman a bankruptcy expert and addressed the idea of BP filing for bankruptcy. When asked the question, “Let’s say you’re advising BP. What would you tell them to do?” Kaufman replied:
I’d advise them to explore the option of bankruptcy. I only know BP from public information. BP has a lot of cash and the ability to generate huge amounts of cash. But remember, just because BP can pay claims doesn’t mean they should, or that they will, given that their primary obligation is to their shareholders.
I find the last line particularly interesting. “Just because BP can pay clams doesn’t mean they should, or that they will, given that their primary obligation is to their shareholders.”
I translate the statement this way. Since BP’s primary responsibility as a company is to maximize the wealth of their shareholders, they are not obligated to pay claims to the people who were and continue to be negatively affected by the results of their actions. So, BP is not responsible for any harm they cause, unless it is to their shareholders?
I don’t think there is any question that BP will not end up paying billions in claims. For me, the question is much larger. Why should we even be questioning whether BP will pay claims? How did our business community get to the point where someone would say that a company that causes destruction to others is not necessarily responsible for their actions, given that their primary obligation is to their shareholders?
All I can say is I am proud of the work of B Lab and even prouder to be part of the movement.
Interested in Atayne? Better Know them here.
Atayne leverages groundbreaking technologies and uses “trash” (e.g. plastic bottles, coconut shells, crab shells, old garments) to develop its line of high performance athletic gear. They offer long and short sleeve performance tops that are emblazoned with Point of View (POV) statements such as “Run Hard. Tread Lightly.” and “Reduce. Reuse. Recycle Run.” The POV graphics are designed to act as mobile “billboards” allowing wearers to express their point of view. Visit atayne.com to learn more.
This post originally appeared on The Red Shirt Blog.
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