Share your case study on a better way to do business
The way you run your businesses – in the interests of all stakeholders, not just for shareholders – is the big topic of the moment. The European Commission consulted on how businesses should be governed to meet the demands that our world faces, whilst creating and supporting livelihoods equitably. The consultation led heavily with a framework of questions around incorporating through mandatory legislation – in the daily operations of a company – the interests of all stakeholders. As B Corps, you are a unique collective of businesses who already voluntarily practice the so-called stakeholder governance model and who adopted (or is preparing to) this commitment to balance interest of all stakeholders in your company’s articles of association, statutes and other legal documents.Together with your input and The Good Lobby, B Lab Europe responded to the consultation and presented our position in a letter, signed by over 60 B Corps.
Our core proposal is that:
Board directors of companies registered within the European Union must consider the interests of all the company’s stakeholders in their decision making.
There are many proposals underway in the EU that further the sustainability related path that the EU has set for its economy. These include proposals for regulations related to non-financial reporting, to investors’ duties and to due diligence in supply chains. These all need to be aligned for the fullest impact on our economy, society and planet.However, there is resistance, confusion and some fear regarding our core proposal.
Resistance – because the dominant business thinking remains strictly profit-led. It is much more demanding to run a company with all stakeholders in mind.Yet, it is also more rewarding, more engaging, and more impactful in the long term. As B Corps, your experience speaks to the benefits of this approach, and how it removes a layer of governance risk that is otherwise inherent in short term profit-led strategies.Confusion – because the concept is novel and open to interpretation and different applications. Who are the material stakeholders for the company?How can I balance and manage conflicting interests? What mechanisms can be used to adopt this approach? Is board level representation for all these different groups necessary? Has it been done before? That is why we ask you – the 600 B Corps in Europe and 4000 B Corps globally, to help demystify this concept, and provide a variety of practical examples on how you have implemented this approach in your companies.
Fear – because directors, management board members are not clear what it means for their own liability, nor whether it will affect investors’ decisions when they seek to raise capital for the business. On capital raising, the evidence of B Corps going to IPO and of capital invested into B Corps through private equity funds shows that investors are positive about B Corps: at least $3.5bn of capital that had been invested in B Corps up to 2018. It now far exceeds this. Additionally, some company leaders are fearful about managing a company designed to deliver on a more complex set of outcomes. The 4000 B Corp leaders are there to replace the fear with inspiration and support.
To break down these barriers, B Lab Europe began hosting a “Coffee in Good Company” series of conversations on exactly these themes. These are short, informal discussions, live streamed and open to all.
The key topics we will address are:
1.What does stakeholder governance mean to you and why does it matter?
2.How do you gather and consider stakeholders’ interests in your company?
3.How do you manage stakeholders’ conflicting interests?
4.How has this approach affected your company? (we seek specifics here)
5.How have your investors reacted to your B Corp status and the changes that you have introduced in your legal documents?
We would love to host a talk with you as our guest for one such coffee session.We started this series in May and will continue our advocacy throughout this year, as we track the progress of the agenda within the EU. If you want to get involved, please email firstname.lastname@example.org.