B Corps Meet the Moment: B Corp Leaders Rely on Values Amid Modern Challenges
September 3, 2020
Company Leaders Discuss How B Corp Values Shaped Their Business and Their Pandemic Response
This article is the first in a series of Founding B Corp interviews, where B The Change holds conversations between Certified B Corporations that helped found the B Corp movement and other businesses in the B Corp community. The series ties the reasons for the B Corp inception through to today’s discussions around business’s role in solving global and social issues.
Before the coronavirus pandemic or the current protests around racial justice, there was already a growing sense that the dominant model of capitalism does not work for a wide range of stakeholders, including workers, the environment and marginalized communities. Now, calls for businesses to operate more ethically and responsibly have become much louder.
In response to the effects of the pandemic on essential workers and recent examples of racial injustice, people have been quick to call out businesses that are failing to meet the moment — either by not providing ample protections for employees or by issuing statements about racial justice without making tangible commitments to address inequalities. Certified B Corporations have stood out as examples of how businesses can commit to positively impact society with effective stakeholder governance.
The principles that B Corps uphold through their stakeholder considerations are more important now than, perhaps, ever—with a need for business leadership to take care of employees, supply chains, the bottom line and more in unprecedented times. To get insights on how B Corp values have found renewed relevance and provided stability in an ever-changing reality, B The Change spoke with business leaders from BetterWorld Technology, an IT managed services provider and a founding B Corp, and Traction on Demand, a B Corp since 2013 that consults with clients on how to implement and use Salesforce effectively.
How has the coronavirus pandemic highlighted the need to move away from shareholder primacy and toward stakeholder governance?
Greg Malpass, CEO of Traction on Demand: Business needs to find a way to perform, but it can’t do that at all costs. Playing out our COVID-19 experience, we basically watched tens of millions of dollars vaporize in terms of our forecast. So we immediately shifted our goal to be to keep employees together. We immediately went to break-even business positioning, and 90% of the team participated in a no-pressure option to reduce salaries temporarily and give us some runway. It was the core B Corp values that allowed us to shift — and for employees to trust us — and we have been able to get through so far and paid everyone back already.
John Jordan, General Manager of BetterWorld Technology: Throughout the pandemic, we have not seen a significant decrease in our customer base, although like with Greg, our forecast growth is gone. We actually onboarded our second-largest customer in company history in the middle of the pandemic. It was lots of work, but the company’s mission was the selling point, even though we were the more expensive vendor in the deal, which highlights the need right now for companies to have and express a purpose.
Jolene Chan, Chief Impact Officer at Traction on Demand: We have also seen that having the B Corp certification to tie into our values has been tremendous. It is a great way to engage current employees but also to recruit employees who now have a different value system, whether they’re millennials focused keenly on the environment or people coming through the current pandemic and looking for more meaning in their work, looking to make a difference.
Matt Bauer, co-founder of BetterWorld Technology: The environmental impact of our economy has also come under scrutiny during this pandemic. The two largest contributors of America’s carbon emissions are buildings and transportation. As we saw through COVID-19 with people not driving to work and not using commercial business space as much, there is a more environmentally friendly way of doing business. One thing we plan to do is encourage folks to have more flexible work supported by a suite of digital products and services.
How did certifying as a B Corp help your business? How does it help you to meet this moment?
Bauer: We saw the need for a marker like B Corp certification when we were working with Social Venture Network in the early aughts. We met up with B Lab co-founders Jay Coen Gilbert and Bart Houlahan and other companies, like Seventh Generation, and realized that we were all growing, but there was no framework for us as small to midsize companies in this space. We decided the B Corp framework is just that — a framework for companies to follow.
In 2006, we got on stage with B Lab and other companies and officially launched B Corps. We took the B Impact Assessment the first day it came out, and it helped us immediately. We thought we were doing a great job, but we saw we had holes right away to work on. It helped us talk to customers, to employees, to set our bar and find out how to improve it. From that starting point, it helped us focus on our mission — how to use a telecom network to do good things in the world.
Tying to today, we saw the environmental impact through COVID-19 closures with people not driving to work and companies not using commercial business space and have been trying to get folks to offer more flexible work by providing a suite of products and services. We want to use our offerings to have a positive environmental impact. And we still rely on the B Corp logo to communicate our mission more clearly.
Malpass: The biggest thing in going through the assessment in the early days as a business was finding the areas where we scored very poorly that I hadn’t paid attention to. For example, it highlighted the problems with single-leader ownership, which inspired us to do employee ownership. Now we have almost 500 employees enrolled in our ownership program.
All employees are starting, especially in COVID-19, to look to their company leaders as leaders in society. I think B Corp is a great platform for doing that. Being a B Corp is a continuous call and agitator to show a good business can be profitable. You just can’t do good to get paid for it — this provides the authentic line and marker.
Chan: In our sector, there is a shortage of talent in the marketplace. Having the B Corp to tie into the values has been a tremendous way to engage current employees and to recruit employees that now have a strong value system. We see this in millennials focused keenly on the environment, or people coming through the current pandemic and looking for meaning, looking to make a difference.
Jordan: We’ve been a remote company for 10-plus years now. And, we have a diverse workforce: two-thirds of our employees are People of Color and/or identify as women. We were set up based on our B Corp values and company mission to meet the moment and provide resources for companies to switch to a more flexible structure that can allow more people to join the company.
Bauer: I’d also add that, in terms of dealing with your board and making decisions, the governance piece of being a B Corp puts a physical fence around your mission. Unless you change the bylaws and make this governance commitment, your mission can get overrun in a sale or other decisions.
From your perspectives, what is the state of the B Corp movement and the drive for systems change?
Bauer: BetterWorld put its time, energy and money into helping B Lab get things going. Now it feels like it’s paying off. Often, I drive down the highway and see a B Corp logo on a billboard. We’re hitting the mainstream, and people are excited.
Malpass: Becoming a B Corp is about creating a longer-term, more permanent impact than any leader can plan for or do themselves. B Corp certification opens up another level of trust to help people see how serious we are about making a positive impact. Our B Corp status has become an instant “in the club” marker that gets us in the door to talk about our services and who we are.
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