By?Anthea Kelsick and Ben Anderson, Co-CEOs B Lab U.S. & Canada
A Bold New Economic Reform
We are proud to be stewards, along with you, the B Corp community, of our shared vision of an inclusive, equitable, and regenerative economic system for all. We are at a watershed moment seeing the system changing before our eyes due to work we’ve been doing together for over a decade.
We now have an opportunity to extend this transformation up the investor chain to unlock the potential for even deeper economic systems change. In partnership with legal experts, the academic community, and with advice from B Corps leaders, we have established a targeted policy agenda to further advance benefit governance. Today we are celebrating the release of a white paper: From Shareholder Primacy to Stakeholder Capitalism: A Policy Agenda for Systems Change. Please see below for important (and quick!) ways we need your action and support.
The milestones began a decade ago when the first benefit corporation statute became effective?in Maryland on October 1, 2010. Since then largely bipartisan votes have allowed it to pass in 38 states in the U.S. including Delaware and most recently New Mexico, as well as take root in Canada in British Columbia.
The move to benefit governance has paved the way for global adoption in three?countries —?Ecuador, Italy, and Colombia —?with dozens to follow around the world. We’ve also seen the move to benefit governance catalyze precedent-setting steps in the public market, including 99% shareholder votes for both Danone and Amalgamated Bank to legally embed purpose, as well as two successful IPOs just this year of existing benefit corporation’s, Lemonade and Vital Farms.
This is an unparalleled legislative achievement. And together we have proven the broad appeal of this governance approach —?across borders, across party lines, across industries —?giving credibility to this new policy agenda that will push legislation further. You are the proof that a benefit governance approach is not only good for business, but also for workers, communities and the planet.
A Change That’s More Important Than Ever
As the pandemic and the reckoning with racial injustice have further exposed the flaws of shareholder primacy, the time is now?to end this practice. Shareholder primacy is at the root of so many of the challenges society is facing today —?including wealth inequality, systemic racism, gender inequality and more — and as we write in the foreword of the paper, it will take policy change to turn this around (see Spanish version here).
The policy agenda revolves around two core reforms:?
First, that in order to see systems change we need to see benefit governance in both companies and institutional investors, so the capital markets look beyond individual company returns and take responsibility for the impact of businesses and investments practices on society and the environment.
Second, that companies and institutional investors be required to adopt benefit governance where the voluntary adoption of a leading segment of the private sector, i.e. the current wave of B Corps and benefit corporations, while they are influential, will not be sufficient to enact true systems change.
These reforms are necessary because the law that currently governs investment and corporate fiduciaries actually requires them to chase profits above all else, regardless of how it may hurt workers, their communities, or the economy. Laws and regulations act as roadblocks for companies that want to create value for all stakeholders. Investors are also pushing for financial return at individual companies and ignoring the impact of their investments on the entire economic system even though they are investing on behalf of people (i.e., human beneficiaries) who benefit when the entire system is managed well.? Incentives are misaligned across the system. The time has come to require companies and investors to be better stewards of our economy.
We Need Your Help
As the leaders of enacting benefit governance legislation over the last decade, this policy agenda needs your leadership too.? This will be an ongoing effort and it will take time to come to fruition. For now, we need your help with a few things:
Spread the word: Let’s unleash the power of our combined network, and share the release of the policy paper with your audiences.
?Take the time to read the white paper to deeply understand. Stay tuned for engagement opportunities?that will help onboard you to this policy agenda.
Share your feedback and ideas for targeted outreach with legislators: Connect with us at firstname.lastname@example.org. We are currently developing a strategy in partnership with experts to guide our outreach to policymakers, and we welcome integrating you into these plans so that we are coordinated.
As a Black woman and white man co-leading B Lab U.S. & Canada, we see and feel the urgency to enact this fundamental change. Just months ago, we called on the community to tackle racism as accountable business leaders. Benefit governance and anti-racism go hand-in-hand addressing some of the root causes of systemic racism. So we call on you today, to join us in this policy initiative, to take the actions outlined above, and work to further change the system.? By requiring accountability for investors and business leaders, we can ensure all people have equitable access to and benefit from a more inclusive economic system.
Anthea & Ben?
Co-CEOs, B Lab U.S. & Canada