Remaking capitalism: The movement for sustainable business and the future of the corporation

Abstract

PurposeThis article examines the relationship between stakeholders and shareholders and identifies the key lessons from the B Corp movement that serve as practical tools for businesses – not just B Corps – to be more stakeholder focused.Design/methodology/approachThis article uses an in-depth interview with the author of Better Business: How the B Corp Movement Is Remaking Capitalism.FindingsThis article focuses on the pros and cons of the B Corp movement. One key point of discussion is that because B Corps focus more on stakeholders in general, they are more likely to attract likeminded employees who also support the companies’ missions, which also leads to greater retention rates. There is also growing interest from the investment community in B Corps and stakeholder-driven companies generally. However, a big challenge for B Corps lies in customer awareness. While many consumers may be buying products from B Corps, they do not know about the certification that links them together. A further conclusion is that even if a company does not want to be a B Corp, they can still benefit from the different stakeholder management tools and processes the movement has developed.Practical implicationsThe article argues that businesses can – and should – be responsible and accountable to any stakeholder beyond shareholders. While they do not necessarily need to become B Corps, they can use the accountability and governance tools - like the B Impact Assessment (BIA) and benefit corporation governance - as guides to better manage their businesses to be more sustainable and resilient and to contribute to a better society.Social implicationsThe B Corp movement has emerged as a powerful voice calling for businesses to balance financial returns with environmental, social and governance (ESG) performance. The B Corp model shifts conventional business from a shareholder primacy to a stakeholder focus, through novel corporate governance and accountability mechanisms. This article investigates the key lessons that all businesses can learn from the B Corp movement to make the world a better place to live.Originality/valueThis article takes a pracademic approach using academic research on the B Corp movement to generate actionable lessons for businesses.