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#552: Be Aware of A New Type of Corporation: The B Corp

Posted By Mark Haas CMC FIMC, Tuesday, April 26, 2011
Updated: Tuesday, April 26, 2011
I have heard about the new B Corporation (benefit corporation) but am unsure how this relates to consultants or their clients.

Many companies, consumers and consultants prefer to work with socially and environmentally responsible companies. However, there is little other than a company's own assertion that they are a "good" company on which to make a decision to purchase, partner or invest. A B Corporation is a values-driven company that is certified by its mission, legal structure and actions to be organized and operated by its commitment to the triple bottom line of people. planet and profit. It embeds social and environmental responsibility into its structure, processes and culture.

Benefit corporations were established to supplement the traditional C Corp, S Corp and Limited Liability Corporation. Maryland was the first state to establish legal status for B Corps in 2010 and other states are in process, with the intent to provide incentives and tax breaks for socially productive companies. Given that investors and consumers increasingly demand hard evidence of socially responsible operations, there are now certification and audit standards and processes to assure that a company commits to stakeholders as well as shareholders. As of January 2011 there were about 400 B Corporations.

How is this important to consultants? Other than being aware of this form of organization and sharing this with your clients, as appropriate, consider two possibilities. First, this is a potentially new area of consulting in helping companies move toward certification and passing their audits. Second, B Corps may be interesting targets to whom you can consult if you provide sustainability, customer service or other stakeholder-centric services.

Tip: The B Corp legally recognizes that customers increasingly mandate environmental and socially responsible investing and purchasing. Consultants should be well ahead of their clients and communities in this area.

© 2011 Institute of Management Consultants USA

Tags:  certification  legal  trends 

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