The Future is Already Here talked with James Perry, who's heading up the B Corps launch in the UK. Here are some key comments and learnings from that conversation:
- There are 3 key words to B Corps: purpose, community, relationships.
- "It's inevitable that the economy will evolve—young people are populating new power structures."
- "Profit maximising has always been the aim of businesses. That's what's taught at business schools. And because of the structure of corporations in the US, it was illegal for directors to do anything else [until the creation of the benefit corporation].
- Normal businesses are for the benefit of the shareholder. B corporations are for the benefit of all (four) stakeholders, who are:
- the environment
- This formalised structure changes the role of the board of directors. They can now judge a firm's performance against different criteria (as explored in the 200 tests in the B Impact Assessment tool).
- Perry also worked on the British government/G8's review Social Impact Investment Taskforce, asking questions such as: What is the purpose of capital? Can capital be invested to create social and financial value?
This is going to change government, business, work
- Perry is very clear on what social business—through B Corps certification, social impact bonds and social impacting investing—can do for the world.
- "This changes government"
- "Government was never very good at solving social problems. But the people at the front line are. So instead of waste money, social impact bonds use money from private investors to solve social problems."
- Hence, Social Impact Bonds in the UK (though there are some questions of whether these are the long-term future: see Social impact bonds: is the dream over? on the Guardian).
- "If you challenge the role of business, you find that capital markets don't understand it. Their regulations are set up for a binary world. You have to rethink regulation and the capital markets…"
- Hence, the Social Stock Exchange — whose first IPOs are set for the first half of 2015.
- "… and then you start to re-think the role of government. If business takes responsibility for solving social problems it changes the role of government."
- "This changes work too. Work stops being a transaction, where I turn up and I do what you tell me, and then you pay me. Instead, how can I express myself through this platform."
- (Note: this comment exactly mirrors a passage in Stuffocation on the changing nature of work. See bottom of this page.)
- "This changes competition. The current system is informed by the Darwin's idea of survival of the fittest. But people miss the fact that collaboration is as important in Darwin as competition. That's been forgotten by the Neo-Cons. If it's about making money, competition works. It creates lower prices.
- "The business model of competition is monopolistic: 'I own the space, I own search, I own social networking, I own retailing.'"
- "But with collaboration it's different. You're not trying to make the most money. You're trying to make the world better. To do that you have to collaborate. That opens up questions of community and thinking and competely changes your viewpoint."
- "Competition is about being the best in the world. Collaboration is about being best for the world."
There are now more than 1200 companies certified as B corporations in 35 countries. There are already 50 in the UK, from a fund management firm, to an advertising agency and consumer brands.
Watch out for more news on B Corps in the UK. There is a “co-creation” event on April 17, 2015. The official launch is in September 2015.
We at The Future is Already Here believe that the emergence of B business reflects the cultural shift from materialism to experientialism, as explored in James Wallman's book Stuffocation. Here's the passage from a section called "Living in an Experiential World", with the most important sections in bold:
Work will change dramatically. Instead of viewing work as a way to gather cold hard cash to buy things we don’t need to impress people we don’t like, we will think of it more as a stage to express ourselves and realize our passions. A Harvard Business Review columnist, Tammy Erickson, summed this idea up in the phrase: ‘Meaning is the new money.’
To reflect this shift, and attract the best talent, businesses will judge their success in more meaningful terms than just money. You can already see this happening in the rise of benefit corporations. First created in 2010, in Maryland in the US, and better known as ‘B corporations’, these companies are not concerned with maximizing shareholder value alone, as traditional companies were. Instead, they measure success not only by the profit they create, but also in terms of their impact on society and the environment. Following a similar ethos, the B Team was founded in 2012 by two business leaders, Sir Richard Branson and Jochen Zeitz, to encourage more businesses to put people and the planet on a similar level to their profits.