There’s a promising development in the capitalism department these days. It’s called the Benefit Corporation. It’s pretty new, and it’s important. This article in The Nation tells you what’s what.
Benefit corporations are characterized by three things: (1) The purpose of such companies is to support the triple bottom line. That is, they are sworn to protecting the environment and doing good things for the community as well as earning profit; (2) Their social accountability standards are high; (3) They work to build sustainable businesses that are designed to last.
A benefit corporation is not susceptible to takeover.
Now, why would anyone want to do such things? Ben & Jerry’s Ice Cream is a cautionary tale. As we all know, B&J was known for their social and environmentally responsible policies. Long before there were benefit corporations, B&J was an ordinary corporation that became nicely profitable. Like all other corporations, their legal responsibility was to maximize profit for the stockholders. When Dutch food giant Unilever came calling, management could not but succumb to their takeover bid. B&J under Unilever continues honoring many of their social and environmental commitments—the Dutch have a strong national ethic of caring—but they are under no legal obligation to do so. Ben and Jerry themselves have no role in operations. As others have commented, the soul has gone out of the business. Other corporations taken over might not be so well treated.
There is a species that I call takeover sharks who don’t give a damn about the business, social and environmental responsibility, the employees, or anything else. Their MO is to leverage a buyout against the company’s wishes, close the business, put everyone out of work, sell off all the assets, and make a ton of money for themselves, in what to me is just about the sleaziest kind of operation there is.
But they can’t do that to a benefit corporation, because a benefit corporation is legally required to fulfill its social and environmental duties, and any buyer of the corporation would have the same responsibilities. A worker-owned company is doubly protected, because profits accrue only to the worker-owners, all of them, not capitalist owners. The worker-owned corporation cannot be bought because it cannot be sold. You can only buy one share of a worker-owned company, and only by working there. Takeover sharks usually do their dirty deeds by gaining majority control of the company stock.
Benefit corporations first popped up in Maryland in 2010. California recently joined up, and now there are eight states on board, with others working on it.
King Arthur Flour gets it all right.
King Arthur Flour is a worker-owned company from Vermont that gets it all right. With 200 workers, they make excellent flour that is widely distributed across the states; you can find it in good stores near you. Besides being worker-owned, with excellence every step of the way, and a triple bottom line, they have protected themselves by becoming a Benefit Corporation. Their profits belong to everyone in the company. Their triple bottom line is legally inviolable. They are impervious to sleazeball capitalist antics that might ruin them.
The direction King Arthur and others have taken as a worker-owned benefit corporation is exactly what must be done to restore commerce to sanity, or sanity to commerce, with concentration on proper values and a legal apparatus to keep it that way.