What is a Public Benefit Corporation and why it matters?
Public Benefit Corporation is a new term in the business world. It’s a new way of running the for-profit company that is legally obligated to consider the impact of their decisions on society, not just shareholders. This is a huge step toward the world where the values such as the clean environment, equality and education are being highly prioritized.
Companies drive our economy, and it is the economy that dramatically reflects on a society. Therefore it’s crucial how the companies are being operated and what is their impact, even only in a local community. For example, a lot of companies focus on creating a profit as a number one priority. We’ve all heard and read the company’s mission, such as “Being the number 1 player in our market”. Now, we all know these are not just words being displayed on the website. It’s a reflection of the mindset of people running the company (or worse, allowing a designer freelancer to write the mission statement instead of the co-founders). Yes, as a company you need to be profitable in order to keep producing, adding value to the employees, customers and shareholders. However, this does not mean that being profitable should be the company’s number one priority. Because when it is, the corporate decisions that are being made along the way in these companies, most likely will cause a long term damage in a society. Social impact starts behind the company’s walls. There are unlimited opportunities of being socially responsible for the people working in the company. Creating a safe environment might just be one of them. Unfortunately, the latter is still a privilege and not the basic human right.
So, when we have companies that think and do beyond the profit, care deeply about their employees, provide a great user experience, limit their negative impact on the environment, encourage education and equality, employees do not work anymore for the company, but in the company for the mission. Eventually, the movement starts attracting other people, organizations and companies to do the same. Simply, the world becomes a better place to live in.
A great example is definitely Kickstarter. They made a legal commitment to provide a positive social impact, by becoming a Public Benefit Corporation pioneer. What a move. Here you can read their first annual Benefit Statement.
Here’s to the more people that dare to make a commitment to provide a positive social impact.