Ask HN: What do you think of B-Corp (balance profit with people and planet)
18 comments
A nearby startup went through the evaluation and aim to complete it eventually, some requirements take years to fulfill. They say it's a VC and possibly acquisition poison-pill. All the investors they talked to didn't like the added complexity of B Corp.
It's nothing but a feel-good virtue signal boost. Worked for one that fully enabled casual sexual harassments and practiced frat-culture of pressuring workers into drinking alcohol, wouldn't think twice between aggressive cash-burning and laying off workers, severely underpays people who have been with the company for years. CEO blatantly told a journalist to call 1800-EAT-D**.
The fact that such company can get certified makes this program a joke.
"Balancing profit with people and planet" is just another way of saying "acting in the public interest." Which, in theory, all corporations are legally bound to do. The problem is that, until recently, there hasn't been the political will to enforce the public interest obligation. This is changing, particularly in terms of environmental responsibility, as the public is becoming increasingly aware of the massive environmental and health costs that many corporation offload onto the public. I think the only real problem with the B-corp idea is that it's optional.
I agree with your original statement, but i don't believe anything is really changing on that front. For examples, regulations pushing for electricity-powered cars completely ignore the ecological/maintenance impact of embedding many sensors/firmwares in the cars.
Private profit is and will remain strongly opposed to the public interest.
Private profit is and will remain strongly opposed to the public interest.
> Which, in theory, all corporations are legally bound to do.
Which country do you live in, and are they accepting immigrants?
Which country do you live in, and are they accepting immigrants?
Here in the United States, the power to form corporations comes from the state constitutions. The applicable clauses typically require protection of the public interest, or note the power to revoke the charter based on misuse or abuse. This explicit or implicit public obligation is apart from the fiduciary obligation of the corporation's directors and officers. Over time, the presumption has come to exist that the single-minded pursuit of corporate profit is enough to satisfy that obligation, by providing goods, services, and jobs. Now that there is greater awareness of the external costs generated by some corporate activity, this assumption can and should be revisited. The constitutional power to raise the bar on corporate behavior already exists, it's simply dormant in most jurisdictions.
In general it makes sense to me to have a legal contract framework for defining stakeholders more broadly than shareholders. What those stakeholders are seems specific to the needs of those involved. Seems like a useful mechanism; not sure what the downsides are at an abstract level.
i think it started out as a good-ish idea, but i was skeptical it would actually lead to anything useful.
then, after a few years, it seemed to be still around and maaaaybe even, I started to think, i was being proven wrong. It seemed like it/they (B Corps) might be somehow useful and/or still relevant.
then, it finally seemed to me to be just about on par with corporate social responsibility (CSR) initiatives -- i.e. good public relations, not much else.
i don't think it is/was a _total_ waste, maybe, if it has allowed at least some people to see that wishful thinking is just not going to get it done -- we need real corporate/financial reform, whether that comes thru legislation or more judicial decisions, etc.
if i saw a B Corp today and they were trying to be taken seriously as a B Corp - that is, _because_ they were a B Corp - that would be pathetic.
other types of orgs might be doing some interesting things - worker co-ops, union shops, etc.
Ecosia, the tree-planting people -- are they any different from, say, Current Affairs, the socialist-in-name-only magazine that fired all its workers that were trying to organize?
would Ecosia employees dare try to organize after they saw how unceremoniously the Current Affairs folks were dismissed?
does going good/hippie stuff require employee control and/or ownership? prob not.
but if you don't have any kind of democracy in the workplace, how can you realistically expect actually-good things to happen on a sustained basis?
just keep hoping that the 'benevolent' CEO/owner doesn't decide to show his/her true colors?
then, after a few years, it seemed to be still around and maaaaybe even, I started to think, i was being proven wrong. It seemed like it/they (B Corps) might be somehow useful and/or still relevant.
then, it finally seemed to me to be just about on par with corporate social responsibility (CSR) initiatives -- i.e. good public relations, not much else.
i don't think it is/was a _total_ waste, maybe, if it has allowed at least some people to see that wishful thinking is just not going to get it done -- we need real corporate/financial reform, whether that comes thru legislation or more judicial decisions, etc.
if i saw a B Corp today and they were trying to be taken seriously as a B Corp - that is, _because_ they were a B Corp - that would be pathetic.
other types of orgs might be doing some interesting things - worker co-ops, union shops, etc.
Ecosia, the tree-planting people -- are they any different from, say, Current Affairs, the socialist-in-name-only magazine that fired all its workers that were trying to organize?
would Ecosia employees dare try to organize after they saw how unceremoniously the Current Affairs folks were dismissed?
does going good/hippie stuff require employee control and/or ownership? prob not.
but if you don't have any kind of democracy in the workplace, how can you realistically expect actually-good things to happen on a sustained basis?
just keep hoping that the 'benevolent' CEO/owner doesn't decide to show his/her true colors?
We should eliminate the corporate income tax to create a greater diversity you companies with goals more complex and nuanced then: for profit or non-profit.
Well sure removing taxes for worker coops and non-profits would help. In fact, in most countries, non-profits below a certain income are tax-exempt.
I think documenting a very specific altruism is more effective than the B-Corp logo, which people may not even know what it is or worse, misremember it's meaning.
* We plan 1 tree for every 100 foobars purchased.
or
* 10% of our profits are donated to foobars without borders.
* We plan 1 tree for every 100 foobars purchased.
or
* 10% of our profits are donated to foobars without borders.
Does it make companies more competitive against companies that don't adopt it?
It's like legally binding yourself to cut on table sugar and ice cream. Sometimes you just end up taking more sugar through juice and yogurt.
Social enterprises here work the same way. I've seen people literally just cut the word "company" from banners and rebrand themselves as a social enterprise to get the benefits of being labeled as such. Someone out there produces inferior products and pays half the salary but it's okay, because everyone has to make sacrifices to meet this balance, especially customers and employees. One social entreprise recycles unused rooms in orphanages to plant mushrooms. My favorite was the one that supports the rejects of society (teen moms, trans people, drug addicts) by getting them to do food delivery.
Sorry for the cynicism, but it's a lot easier to get this wrong than it is to get a normal company to just be more responsible.
Social enterprises here work the same way. I've seen people literally just cut the word "company" from banners and rebrand themselves as a social enterprise to get the benefits of being labeled as such. Someone out there produces inferior products and pays half the salary but it's okay, because everyone has to make sacrifices to meet this balance, especially customers and employees. One social entreprise recycles unused rooms in orphanages to plant mushrooms. My favorite was the one that supports the rejects of society (teen moms, trans people, drug addicts) by getting them to do food delivery.
Sorry for the cynicism, but it's a lot easier to get this wrong than it is to get a normal company to just be more responsible.
I've looked into becoming a B-corp. And unfortunately, it has a very specific opinion on what "good" means. It's very easy to be a horrible company and a B-corp.
So it's a complete waste of time IMO.
So it's a complete waste of time IMO.
I think it's not a good idea. The intention is good, but how do you justify the decisions? It seems that the company would be easy to sue whenever a new study comes out claiming x is good or y is bad. It just seems like it would turn into the arguments in the recent 'SUVs kill' thread.
https://news.ycombinator.com/item?id=28269342
https://news.ycombinator.com/item?id=28269342
It's not a shortcut for socially conscious leadership or lack thereof. Leadership is about people, culture and values. If your leadership lacks any of those, being a B Corp won't save you.
"Profit" is fundamentally opposed to "purpose". Capitalism relies on private property and profits by engineering consent/desire for goods. Any sane system that respects the environment and the people would instead start from needs/desire and elaborate consistent solutions to address them.
Or, formulated another way, one's private profit is always someone else's loss/exploitation.
Or, formulated another way, one's private profit is always someone else's loss/exploitation.
I was looking into this recently, but only superficially, so apologies (and please correct me) if I'm mistaken here:
1. Your intro appears a bit misleading in that because 'Certified B-Corp' is just a certification issued by a private entity, companies are 'legally required' to do those things only to the extent that they are 'legally required' to abide by any contractual agreements with the certification entity and any language they put in their bylaws (e.g. to obtain the certification). That's it. Doing the specific things you say is not 'legally required' in the same sense as you are 'legally required' to pay your taxes. Now - some jurisdictions around the world do have laws creating the figures of 'Benefit Corporations' and specifying what they are legally required to do (in the same sense as paying their taxes).
2. In a global context, the US is an outlier in its cult of shareholder primacy and fiduciary duty. So much so that I read that in US jurisdictions, the reasoning for Benefit Corp legislation is to protect management in case any of these 'good deeds' are viewed as deliberately failing to maximize shareholder value. Frankly that seems a bit far-fetched unless there is something demonstrably egregious or shareholders are being misled (you don't see shareholders suing over companies going carbon-neutral, offering employees snacks or refraining from price-gouging). But, in any case, in other countries it is acceptable and even expected (in a few it might even be required) for companies in general to benefit various classes of stakeholder - customers, employees, etc.
3. B-Corp Certification doesn't really have many hard & clear requirements - it's that fluffy language + audits. Frankly, sounds like a recipe for bureaucracy.
4. I had come to the exact same conclusion as another commenter here - that if your objective is to be part-for-profit-part-do-gooder, you'd be much better-off having an objective target. E.g. 10% of net profit will be given to charity. That would just plug into your regular financial audit (and above that, you could have someone just checking to make sure the charities aren't related parties or fronts for cost-centres). If it helps, you could have NGO's promoting and certifying this type of company too like for B-Corps. My suggestion would be T-Corp as in T for Tithe, though I wonder whether the Christian connotations might put people off.
1. Your intro appears a bit misleading in that because 'Certified B-Corp' is just a certification issued by a private entity, companies are 'legally required' to do those things only to the extent that they are 'legally required' to abide by any contractual agreements with the certification entity and any language they put in their bylaws (e.g. to obtain the certification). That's it. Doing the specific things you say is not 'legally required' in the same sense as you are 'legally required' to pay your taxes. Now - some jurisdictions around the world do have laws creating the figures of 'Benefit Corporations' and specifying what they are legally required to do (in the same sense as paying their taxes).
2. In a global context, the US is an outlier in its cult of shareholder primacy and fiduciary duty. So much so that I read that in US jurisdictions, the reasoning for Benefit Corp legislation is to protect management in case any of these 'good deeds' are viewed as deliberately failing to maximize shareholder value. Frankly that seems a bit far-fetched unless there is something demonstrably egregious or shareholders are being misled (you don't see shareholders suing over companies going carbon-neutral, offering employees snacks or refraining from price-gouging). But, in any case, in other countries it is acceptable and even expected (in a few it might even be required) for companies in general to benefit various classes of stakeholder - customers, employees, etc.
3. B-Corp Certification doesn't really have many hard & clear requirements - it's that fluffy language + audits. Frankly, sounds like a recipe for bureaucracy.
4. I had come to the exact same conclusion as another commenter here - that if your objective is to be part-for-profit-part-do-gooder, you'd be much better-off having an objective target. E.g. 10% of net profit will be given to charity. That would just plug into your regular financial audit (and above that, you could have someone just checking to make sure the charities aren't related parties or fronts for cost-centres). If it helps, you could have NGO's promoting and certifying this type of company too like for B-Corps. My suggestion would be T-Corp as in T for Tithe, though I wonder whether the Christian connotations might put people off.
This movement seems to be gaining popularity lately, but it could be the echo chamber effect as HN mentions are very limited.