B corporations gain media spotlight
New York Times blog profiles growing movement
According to standard U.S. corporate law, corporate trustees have a fiduciary obligation to maximize shareholder return. This has led to many “socially responsible corporations” being acquired by multi-national companies. Famously, a decade ago Ben & Jerry’s was acquired by Unilever. Other examples abound, as Tina Rosenberg of the New York Times details here. As Rosenberg writes: “Silk Soymilk was bought by Dean Foods, America’s largest dairy company; today, most of Silk’s products are no longer organic. Horizon Organic Milk is also now owned by Dean Foods. The organic brands Cascadian Farms and Muir Glen are now part of General Mills. The natural toothpaste-maker Tom’s of Maine was bought in 2006 by Colgate-Palmolive. The juice-maker Odwalla’s Web site advertises it as “earth-friendly” and as “a business with a heart” but nowhere on the site will you find the information that it is a wholly-owned subsidiary of Coca-Cola. Stonyfield Farms yogurt company is owned by Dannon. The Body Shop was bought by L’Oreal in 2006. The cereal maker Kashi was bought in 2000 by Kellogg, Naked Juice is owned by Pepsico and granola-maker Back to Nature and Boca Burger are subsidiaries of Kraft.”
In response to such developments, since 2006 a growing movement has emerged to form B corporations, a new corporate form that permits corporate owners to subordinate profix maximization to social goals, as defined in the corporation’s bylaws. This blog first profiled B corporations three years ago here. Originally a voluntary designation monitored by the nonprofit B-Lab, the state of Maryland became the first state in the nation to create a B corporation law in 2010. As Rosenberg details, Vermont, New Jersey, and Virginia have since followed Maryland’s lead. At present, there are over 400 B-corporations in over 60 industries, which combined generate over $1.87 billion in annual revenue. For example, King Arthur Flour, a 200-person employee stock ownership plan (ESOP) company — and the nation’s second largest flour maker — is one of the first B corporations to be formed. Additional B-corporations are profiled in this Tina Rosenberg follow-up column.
Additional mission-oriented B corporations profiled in Rosenberg’s two-part series include the following:
* Opticos Design: a Berkeley, CA-urban design and planning firm
• Casecade Engineering, a Grand Rapids, MI plastic manufacturing firm with over 1,000 employees and $250 million in annual sales
• Ice Stone, a Brooklyn, NY-based firm that creates surface material surfaces from recycled waste glass that can be used to produce kitchen counter-tops, bathroom vanities, shower walls, tabletops, flooring, bar tops, conference tables, windowsills, and related products.
• Better World Books, a northern Indiana company, founded by three Notre Dame students, which now employs over 200 people; the company collects books and textbooks through a network of over 1,800 college campuses and partnerships with over 2,000 libraries nationwide while donating over $9 million to support literacy campaigns and donating over 4 million books that it cannot resell to nonprofit organizations