The purpose of business is to make money. But should that be the only purpose? Many modern business owners think not. Which is why an increasing number of companies are choosing to operate as a new form of business known as a B Corp (short for Benefit Corporation). Over three-fifths of U.S. states now have provisions for the formation of B Corps, and this new type of corporation is poised to change American business.
What Makes B Corps Different?
B Corps are for-profit businesses that commit themselves to embracing environmental sustainability and/or social change, thereby benefiting their communities. This commitment isn’t theoretical. The bylaws of B Corps require the business to be truly beneficial and provide benefit reporting to shareholders. Unlike at traditional businesses, shareholders hold B Corps accountable for their profit as well as for how successful their business is at contributing to the greater good. For B Corps, benefiting people and the environment is just as important—and in some cases more important—than generating profit.
What Are the Benefits of Forming a B Corp?
When you run a traditional for-profit business, your investors expect you to be entirely focused on profitability. That can make you a slave to making money. With a B Corp, your investors know from the get-go that your goals are much larger than turning a profit. This gives you greater latitude to manage your business in the manner you desire and focus on producing the results that are most meaningful to you.
Becoming a B Corp requires you to demonstrate in filings all the ways you’re creating real benefit for people and/or the environment. You can’t just claim to be sustainable or socially conscious; you have to prove it. And this means consumers and other businesses can trust that companies with B Corp status aren’t just claiming to benefit their community. They’re walking the walk. In many ways, becoming a B Corp is like giving your business an official seal of approval.
Better Engagement from Employees
Being a B Corp means that prospective employees—just like consumers and business partners—will know you’re honestly committed to creating real environmental and/or societal benefits. This can help you attract employees who are already committed to issues of sustainability and/or social change. Instead of staffing your business with people who are looking for a paycheck, you have the opportunity to staff your business with employees who are engaged in what you’re doing. And engaged employees are the best employees. In fact, businesses with engaged workforces are 22% more profitable and twice as likely to succeed as businesses with less-engaged workforces.*
More Motivation to Be Better
To qualify for B Corp status, your business must complete the stringent B Impact Assessment administered by the nonprofit group B Lab. The assessment measures your business’s social and environmental impact. If your business scores high enough, you can become a B Corp, but you must recertify every 2 years to maintain your status. The B Impact Assessment gives you measurable benchmarks that push you to maintain and improve your company’s social and environmental benefits.
Better Positioning for the Future
Consumers are becoming more and more interested in buying products and services from companies committed to improving communities. Such consumers are known as conscious consumers and they’re often willing to pay more if they know the company they’re doing business with is helping the environment and/or society. The economic impact of conscious consumers is already becoming clear. For example, sales of consumer goods with an element of sustainability have been growing four times faster than the sales of nonsustainable consumer goods.†
How Can You Learn More About Hot Topics in Management?
B Corps are just one of the many interesting topics within the world of business. If you’re interested in a career in management and expanding your knowledge and expertise, earning a business degree could be a great first step.
One of the most popular is a Master of Business Administration (MBA). It’s one of the best business degrees for those who want to successfully run their own business or get ahead in the business world. Some of the top MBA programs are now available through online universities, making it more possible than ever to earn your degree. Through an online MBA program, you can complete the majority of your coursework from home on a schedule that can allow you to continue working full time. Plus, the flexibility and convenience of an online MBA can make it possible for you to graduate faster and at a lower cost than what’s typically possible at campus-based MBA programs.
Whether you’re interested in a local business or the global marketplace, when you earn an MBA online, you can put yourself in position to take advantage of existing and future opportunities.
Walden University is an accredited institution offering an online Master of Business Administration degree program. Expand your career options and earn your degree in a convenient, flexible format that fits your busy life.
*J. Harter, et al., The Relationship Between Engagement at Work and Organizational Outcomes, Gallup, on the internet as a PDF at http://employeeengagement.com/wp-content/uploads/2013/04/2012-Q12-Meta-Analysis-Research-Paper.pdf.
† R. Stammer, It Pays to Become a B Corporation, Harvard Business Review, on the internet at https://hbr.org/2016/12/it-pays-to-become-a-b-corporation.
Walden University is accredited by The Higher Learning Commission, www.hlcommission.org.