We are in the process of putting into practice a new social contract between business and society. The most recent evidence is the Business Roundtable’s August announcement that 181 CEOs of America’s largest companies were committed “to lead for the benefit of all stakeholders.”
As I wrote with my fellow co-founders of the B Corp movement: “While it is appropriate to note, even celebrate, the Business Roundtable’s announcement as a sign of an accelerating culture shift, it is important to recognize that the people who are demanding this shift are demanding action.” More than 30 CEOs from B Corps like Amalgamated Bank, Lemonade and Patagonia took out an ad in the August 25, 2019, Sunday edition of The New York Times to express their eagerness to help the Business Roundtable CEOs turn their bold words into concrete actions.
Many of the businesses who signed the open letter to Business Roundtable CEOs are also on the recently released annual Best For The World list, created by B Lab, the nonprofit behind the B Corp movement, which honors the B Corps achieving the most positive impact, as well as those making the largest measurable improvements to their positive impact on people and planet each and every year. These 2019 Best For The World honorees shine a path for the Business Roundtable (BRT) to follow in achieving each of its five newly announced commitments:
BRT Commitment No. 1: “Delivering value to our customers. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations.”
- Serve those most marginalized. Mass incarceration directly impacts more than 7.5 million Americans and their families and communities. According to the U.S Department of Justice, roughly 70% of incarcerated people return to prison or jail within 3 years of release. American Prison Data Systems provides incarcerated learners with the digital tools they need to succeed as returning citizens. In partnership with corrections personnel, ADPS provides safe, secure, curated content and customized instruction to reduce recidivism and help people rebuild their lives and contribute to their communities. Robert Green, director of the Maryland Department of Correction and Rehabilitation, said, “You’re looking at increasing their grade-level testing 3 or 4 grade levels in 60 days. That’s incredible.”
- See customers as whole people. For health care provider Northwest Permanente, delivering value to their customers includes tackling issues outside the clinic. “Over 60% of health issues are around housing, security, education, and transportation,” says Carolyn Allison of Northwest Permanente. “As physicians, our voices are among the most trusted, yet the field of medicine has been slow to respond to the climate crisis.” Northwest Permanente recently released a climate action plan whose first tenet is to “ensure that the most vulnerable populations in our communities have a leading voice in planning for climate interventions.” This broader vision of customer care is consistent with their nonprofit parent Kaiser Permanente’s new social health network platform, called Thrive Local, that connects health and social service providers to better coordinate care.
BRT Commitment No. 2: “Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.”
- Share power with employees. Ian Martin Group, a 60 year old Canadian engineering, technology and IT-hiring firm, stands out for shifting to a self-management organizational structure. Tim Masson, the Ian Martin Group’s chief steward and CEO, says the move is paying off because without supervisors, a self-management system enables workers to reshape their roles over time to better achieve their goals and the goals of the business.
- Share ownership with employees. EILEEN FISHER is a 35-year-old women’s clothing brand with 1,100 employee owners: 40% ownership of the company has been distributed via an employee stock ownership plan (ESOP). This brand’s success using such a model isn’t a one-off: A new report by the Democracy Collaborative on mission-driven, employee-owned firms finds that these businesses outperform conventionally owned firms in overall positive environmental and social impact.