Are you considering a switch from the traditional business model to something more purpose-driven and socially responsible? A benefit corporation might be the right fit for your organization. Benefit corporations are businesses that seek economic gain and focus on making positive impacts in society and promoting sustainability.
These certified companies operate with transparency in how they work towards their mission, prioritize social and environmental impact and profits, create long-term value for all shareholders, not just investors, remain accountable to their external stakeholders, and much more.
In this blog post, we’ll cover what a benefit corporation is, what sets them apart from regular ones, and why many modern organizations are turning toward this new way of business.
How Can a Company Be Ethical?
Ethical business practices benefit everyone by showing respect for people and our environment. A company can benefit significantly from having an honest approach to its work. Establishing a clear set of core values and standards ensures no grey areas when considering corporate behavior, especially regarding decision-making.
This contributes to better company public relations, communication, and trust. Furthermore, implementing rigorous processes for evaluating decisions, such as employing external scrutineers to validate company environmental policies, helps to ensure the organization remains accountable regardless of growing revenues or success.
What is A Benefit Corporation?
A benefit company, also known as a benefit corporation, implements social and environmental benefits into its business practices. Rather than solely focusing on making a profit for shareholders like traditional companies, benefit companies concentrate on having a positive social and environmental impact on the world.
A benefit company aims to redefine how businesses can profit and do good. They have three primary responsibilities: to consider the benefit of employees, customers, communities, and the environment as part of their decision-making; disclose performance on benefit measures each year; and honor directors who have fiduciary duties to protect the interests of shareholders while regulating company decisions with benefit considerations in mind. These entities must adhere to strict corporate governance and reporting standards to be certified.
Traditional Corporations vs. Benefit Corporations
Traditional corporations are the standard business model we are used to seeing, while benefit corporations focus on sustainability, enhanced transparency, and public benefit goals. Benefit companies have legally mandated social and environmental performance standards that must be met to benefit society.
A benefit company must continually demonstrate commitment to innovation and sustainability and look for ways to help shareholders, employees, communities, and other stakeholders. These companies have higher criteria for accountability, responsibility, and exclusive stakeholder governance when compared to traditional corporations, making benefit organizations more socially conscious and responsible for their environmental contributions.
What’s A Benefit Company – In Conclusion
While there are many different types of corporations, a benefit company stands out because they are legally required to consider the impact of its decisions on society, not just shareholders. This business model is still relatively new, but it has already gained traction among consumers who want to invest in companies that make a positive impact. If you’re interested in investing in a benefit corporation, check online for more information.
