By Professor Dennis R. Shaughnessy
If you’ve watched the HBO comedy series “Silicon Valley,” you’ll hear the tech entrepreneurs lead their investor presentations with “We’re making the world a better place by….” It might be “We’re making the world a better place through Paxos algorithms for consensus protocols…,” or “We’re making the world a better place through canonical data models to communicate between endpoints…”
It’s really funny to watch this spoof on the inflated self-importance of many of today’s tech entrepreneurs, but also a bit sad. Sad to think that supremely talented people really think that they’re “making the world a better place” by solving advanced technical problems for products that mostly serve people who already live in a better place.
Dan Lyons, a writer for two seasons with “Silicon Valley” was our guest at SEI recently. Dan shared very funny but also very insightful stories about his visits with tech royalty in Silicon Valley as the writers developed their one liners for this popular TV program mocking their sense of intellectual, social and cultural superiority. He shared with us his thoughts on how the tech community has evolved (in my words) into an elite club in which massive amounts of wealth are created by the few, for the few.
The thing is, setting aside the “Silicon Valley” story line, business really can make the world a better place. Just not by improved file compression performance that way (no offense).
If we’re looking for businesses that have really committed to making the world a better place, then the best place to look is the “B Corporation” marketplace, B Lab!
From where we sit, B Corporations represent a powerful new movement in business. B Corporations really do make the world a better place by committing to serve not only investors but also the other stakeholders in a business, from employees to customers to communities. Not to mention the planet.
There are some well-known names in the B Corporation universe, like Ben & Jerry’s (Unilever) and Patagonia, as well as emerging names like Etsy, Warby Parker and Method. And more than 2,000 other companies that have earned the B Corporation certification, including many outside of the US (like Natura in Brazil).
What’s different this time around is that the B Corporation movement allows companies to actually measure how socially responsible they really are, and then convert their performance into a publicly available set of scores. B Corporations are measured against metrics in five areas, including the stakeholder groups that are associated with a more balanced model of capitalism.
The approach taken by the B Lab has made companies move past the “public relations” version of corporate social responsibility, and instead demonstrate an authentic commitment to real and measurable social impact values and outcomes like transparency, accountability, inclusion, fairness, engagement and genuine shared success.
Over the past four decades, we’ve been in a “hyper-capitalism” mode in which investors are the center of business, with other stakeholders an afterthought. The B Corporation model returns capitalism to a more balanced and healthy state, in which all stakeholders carry equal importance. In a time of great and increasing inequality, this approach to business is a step towards a more equal and inclusive model of capitalism.
At SEI, we think that students studying business should have the opportunity to learn about the version of capitalism that B Corporations represent. Not just maximizing profit, but achieving broad and sustainable impact, beginning with employees and the communities in which they live. In doing so, we might just avoid the corporate scandals if we taught our young people more about the power of a socially responsible and ethically managed business to do good for others, and perhaps less about the techniques of financial engineering for their own sake.
More and more people (especially young people) will look to the B Corporation certification as evidence of a company that cares about not only about its financial results but also its capacity to improve the lives of others and the communities and world in which we all live.
This special edition of the SEI Newsletter is dedicated to celebrating the B Corporation. Our thanks to NU and SEI alum and B Lab employee Katherine Dumais for her guidance.