Many of the world’s great spiritual traditions point out how our thoughts and words create our reality. It is the same with our laws: the words in our legal documents determine the nature of society.
Just as the following legal documents have changed the course of civilization, the benefit corporation can transform capitalism with two small changes to corporate law: adding a requirement for corporations to create general public benefit by creating a material positive effect on society and the environment and endowing the corporation with a more comprehensive conscience by extending the fiduciary duties of directors to all of a corporation’s stakeholders, including society and the environment:
Here are some helpful resources about the benefit corporation:
The Need and Rationale for the Benefit Corporation: Why It is the legal Form that Best Addresses the Needs of Social Entrepreneurs, Investors, and, Ultimately, The Public
This white paper, originally published in 2011, lays out the rationale behind the benefit corporation and includes a copy of the model benefit corporation legislation.
The B Corp Declaration of Interdependence
This document expresses the ethos behind the benefit corporation and the Certified B Corporation movement.
Making it Easier for Directors to “Do the Right Thing?”
This first article by Leo Strine, Jr., the Chief Justice of the Delaware Supreme Court, establishes the legitimacy of the benefit corporation as a vehicle for corporations that wish to do the right thing by society and the environment.
The Dangers of Denial: The Need for a Clear-Eyed Understanding of the Power and Accountability Structure Established by the Delaware General Corporation Law
This second article by Leo Strine, Jr. establishes that shareholder primacy – the view that the sole legitimate purpose of the corporation is to maximize stockholder welfare – is the prevailing corporate law of Delaware. Justice Strine legitimizes the benefit corporation as a viable alternative paradigm for corporations wishing to pursue other purposes and look out for the interests of all their stakeholders.
The Impact of Corporate Sustainability on Organizational Processes and Performance
This white paper by Professor Robert Eccles and his colleagues from Harvard Business School lays out economic data from a 20-year study showing that corporations adopting principles of sustainability, such as those embedded in a benefit corporation, out-perform their conventional peers by about 5% total return per year.
From Stockholder to Stakeholder: How Sustainability Can Drive Financial Outperformance
This Oxford University and Arabesque partners white paper surveyed 200 academic studies and found that 88% of them found that companies with robust sustainability practices demonstrate better operational performance than their conventional peers.
Here are some helpful resources about the accounting and economics of impact:
Jane Gleeson-White explores the international movement to transform how accounting is evolving to incorporate the effect of business on society and the environment.
Martin P. Thomas and Mark W. McElroy propose a context-based, triple-bottom-line performance accounting methodology.
Kate Raworth offers seven key ways to fundamentally re-frame our understanding of economics.
Here is a resource about the evolutionary advantage of trust-based leadership:
Frederic Laloux shows how trust-based leadership inspires superior performance.