So now, as promised, I’m concluding last week’s post on the benefit corporation (the new generation corporation which is changing the world) with the highlights of the Q&A session which followed the talks by benefit corporation maestroes Rob Michalak of Ben & Jerry’s, Etsy’s Helen Souness and James Chin Moody of TuShare and Sendle.
Rob Michalak answered a question about the 2001 takeover of Ben & Jerry’s by multinational consumer goods corporation Unilever: did this compromise Ben & Jerry’s social mission?
Michalak said that to deal with this possibility, Ben & Jerry’s had made an acquisition agreement with Unilever for perpetuity which created an agreement for what he called ‘a super B Corporation’. It allowed for Ben & Jerry’s to own its Social Mission while Unilever owns B&J’s Economic Mission. Ben & Jerry’s created an independent board which could legally challenge Unilever if it took Ben & Jerry’s off their social mission. Michalak called the acquisition agreement ‘a super agreement, a kind of innovative detente, the first in the world’.
Michalak said the acquisition brought together a company with progressive vision (B&J’s) and one with global scale – and no one knew how that would work together. He praised the vision of current (since 2009) Unilever CEO, Paul Polman, noting Polman’s criticism at the 2015 World Economic Forum of quarterly reporting (because it encourages short-termism in an era when decisions should be based not on profits over the next three months but on the wellbeing of future generations). Also, according to Michalak, Polman has been to Ben & Jerry’s Vermont headquarters twice since he’s been CEO of Unilever – and given ‘it’s very hard to get to Vermont’, this is amazing.
In answer to a question about making his business global, James Chin Moody said yes, he wanted to, and that: ‘It no longer matters where you are. What matters is when you are.’ Which I thought was an extremely neat distinction to make in a global economy which is, according to Moody, no longer about place but about timezone. He said Perth is perfectly positioned to take advantage of this shift, because it shares a timezone with about one third of the earth.
Helen Souness said that marketplaces are virtuous circles: the more buyers you pull in the more sellers you pull in the more buyers you pull in the more sellers … and etc. She said Etsy is ‘globally local’.
Replying to the question ‘Is there a conversation with government from B Corps?’, B Lab’s executive director Alicia Darvall said that they’re having informal conversations with the Australian government; they’re talking with Department of Foreign Affairs and Trade about collaboration. And she cited San Francisco as an example of supportive government: there are some 180 benefit corporations in San Francisco and they’re given a 3-point bonus in the tendering process. She called the legislative reform which is spreading through the USA to create a new legal form to allow benefit corporations (in 27 states to date) ‘game changing‘. B Lab Australia is looking closely at the legal situation here and would similarly like to create a new legal form in Australia for benefit corporations. (This is an extremely exciting possibility.)
James Chin Moody said that certain government bodies won’t talk to you unless you become a non-profit, or are a non-profit. In this way, he said, local government can influence the governance structure of an organisation. He said the culture in Australia is too black and white: it understands either profit or non-profit organisations, but no mix of the two, such as the hybrid benefit corporation. Moody likes benefit corporations because they can ‘have a foot in both camps’. In Australia we need to realise that it’s ok to do good and to make money.
When asked how she and Etsy have built such a good work culture, Helen Souness said: RECRUIT good people in the first place. And make sure they stay close to their community. Souness said when she was interviewed for her job at the Etsy HQ in Brooklyn, NYC, the Chief Financial Officer asked her what she made (presumably her existing wage in dollar terms). To answer, Souness showed the CFO what she made (her own craft creations) for her daughter. I like her style.
And here are the parting remarks from the rock stars of the new economy:
Rob Michalak: ‘It’s cool to come to work every day and say, What are we going to solve today? It’s a puzzle.’
James Chin Moody: ‘Can you narrow your purpose right down, measure it, and align your business model with it?’ His purpose, narrowed right down? To get rid of landfill.
Helen Souness: ‘Let’s get away from the short term. We must make decisions for the long term.‘ As an example, she cited her former company, the employment business Seek, which during the GFC lost 50% of the jobs it had to fill – i.e. 50% of its business – but instead of cutting its own employees in accordance with conventional short-term thinking, it kept its staff on. Seek realised its people were where its value lay. It made no redundancies during the GFC. This is the sort of revolutionary approach to thinking about value – revolutionary because it takes account of value other than financial value, aka the bottom line, money – that I think the new ‘six capitals’ accounting paradigm might (MUST) make possible.
To conclude this benefit corporation evening, here’s a few of the socially-minded businesses in the audience or mentioned on the night:
Australian Ethical Superannuation, which had just won Fund Manager of the Year
Bread & Butter Project, Bourke Street Bakery, which ‘reinvests 100% of its profits in baker training and employment pathways for communities in need’
Conscious Capitalism Australia (‘Conscious Capitalism is a philosophy based on the belief that a more complex form of capitalism is emerging that holds the potential for enhancing corporate performance while simultaneously continuing to advance the quality of life for billions of people.’)
StartSomeGood, a crowd funding organisation dedicated to social change projects
Good on You, which rates brands based on their impact on people, animals and the planet. Their aim is to make it easier for you to know the ethical nature of every brand, starting with makeup and clothing.
In other news, I’ll be in Brisbane on 20-21 June for WOW Brisbane 2015. I’m on a panel called Mother Earth: Women Saving the Planet on Sunday 21 June which sounds fascinating. I hope to see you there.
And then I’m heading into intense writing mode, so I’ll be blogging here only sporadically. I’ll be out and about again in November, when I’ll be in London with Six Capitals and in Edinburgh for the World Forum on Natural Capital 2015.
See you in the spring.