No company is perfect. However, the corporate world has seen a new trend emerge where the corporate world at least appear to align their businesses with the underlying values of their customers and the society overall. While cynics can claim that this is just a polishing of the surface under which lies the same old profit-oriented principle. The cynics say most of the companies do this just to boost their sales. Whatever the motive driving this trend is, it’s is still a positive development that particularly seems to have been gaining traction with the younger generations. What is certain though, is that the trend is shaping how companies are being evaluated and there is more work put in to assessing the overall impact of institutions.
With this trend, new types of co-operative communities have arisen. A good example of this is the community of B-Corporations. In their declaration of Interdependence they state that a B-corporation is “a purpose-driven business that should thrive to create benefit for all of its stakeholders”. The application is evaluated by a non-profit B-Lab team according to answers for numerous questions about company’s policies toward its workforce, society, environment and transparency. Unlike some other certificate based communities, B-Corps have a rigorous application process and compliance monitoring. Every year 10% of all B-corporations are being evaluated at their offices and factories to make sure that the claims made in the application process are being implemented. B-Corporations include some of the most renowned forward-looking companies such as Patagonia and Etsy.
There are two requirements for the application to be successful. Firstly, the company has to take an online assessment where the company has to score at least 80/200 to be considerate candidate. If the company reaches this score, there will be a conference call where the company is require to validate their answers by showing evidence that their answers where true. Secondly, there is a legal requirement that the company has to include its commitment to the wide range of stakeholders in to its governing documents.
At the moment of writing, there are 1785 certified B-Corporations from 50 countries representing 130 different industries. However, what is clear looking at the list of certified B-Corporations is that financial sector is heavily underrepresented. And the few financial institutions possessing the certificate are all relatively small companies and tend to have focus on developing countries or clean investments. Not a single commonly known international bank has the certificate. The only broadly known other type of financial institution bearing the certificate is micro-financing platform Kickstarter.
In February, HCP started the certification process by performing the online assessment test. The results of the assessment came in during the summer. It was no surprise that HCP didn’t reach the required 80 points on the first attempt but rather the results gave a good exogenous evaluation of impact of the policies and processes done in the company’s everyday life. The results showed the areas where the company is already well placed within the spectrum of current ideas of healthy corporate social responsibility such as transparency, corporate accountability and worker ownership. Most of the points 47 points awarded came from the assessments of governance of the company and the treatment of workers. But more importantly it revealed areas where there are still room for improvement.
This is where organisations such as B-corps can add significant value to businesses. Managers and workers tend to be subconsciously biased towards their own entities. This kind of bias is healthy as it can be explained by the affection they have for the company but it can also cause some blind spots. The outside evaluation may often reveal these blind spots regardless whether they come from the bias or from other reasons. Managers usually have improvement plans for the company’s processes and policies, the outside review can be used as a tool to refine these plans.