1. The emergence of B Corps in Britain David Hunter 14 June 2016

2. A declaration of interest and some assumptions
BWB is a B Corp – the first UK law firm to be so
So, pre-disposed to B Corps, but also to other forms of social enterprise
Assuming progress to a social economy is positive and involves:
people and society should be the masters, not the servant of business and the economy
a worthwhile business will look at its impact in the round and for the long term, not focus exclusively on short term profit
this is a desirable goal across the global economy, not just as a niche practice

3. The Business Spectrum Standard Business Social Enterprise
Charity Foundation
Charity
providing
services
Community Benefit
Society
Community Interest
Company
Co-operative
“Social
Business”
Standard Business
Mutual
Social Enterprise
Standard Business CF
CPS
CBS
CIC
Co-op
Mutual
“SB”

4. The social enterprise spectrum
Social enterprises come in a variety of forms – and for good reason
Asset locks are important
Asset locks and other restrictions can limit their reach however
“Social businesses” exist but struggle to carry assurance
Is the B Corp an effective way to extend significantly the practice of social enterprise in the mainstream economy, without losing the qualities that make social enterprise distinctive and without allowing any business to claim it is a social enterprise?

5. Blurring the boundaries
Used to be a binary choice between charity or for profit company
Eroded by the advent of social enterprise and, in particular, the community interest company
B Corp now blurring the distinction further between social enterprise and for profit business
B Corp focus is on intent (how the business is run and for what purpose) rather than how much money is made and for whom

6. Protections
Naturally, this raises concerns for those in the not for profit sector
How can you ensure the Triple Bottom Line approach is meaningful?
Three elements to B Corp status:
The legal test
The impact assessment
The declaration of interdependence

7. The legal test
Requires the adoption of a constitutional commitment to the Triple Bottom Line approach
There are template objects clauses for use by limited companies and limited liability partnerships
Closely mirrors the terminology of section 172 Companies Act 2006, which provides a statutory framework for directors’ duties generally
The wording of the B Corp objects is more explicit about the balance between different stakeholder interests
Whilst it may appear not a massive leap, the following are significant:
- the act of voting to change the articles to make it explicit
- the implications of that on board behaviour
- the public commitment to this approach

8. The template objects clause
(1) The purposes of the Company are to promote the success of the Company for the benefit of its members as a whole and, through its business and operations, to have a material positive impact on society and the environment, taken as a whole.
(2) A Director shall have regard (amongst other matters) to:
the likely consequences of any decision in the long term,
the interests of the Company's employees,
the need to foster the Company's business relationships with suppliers, customers and others,
the impact of the Company's operations on the community and the environment,
the desirability of the Company maintaining a reputation for high standards of business conduct, and
the need to act fairly as between members of the Company,
(together, the matters referred to above shall be defined for the purposes of this Article as the "Stakeholder Interests").
(3) For the purposes of a Director’s duty to act in the way he or she considers, in good faith, most likely to promote the success of the Company, a Director shall not be required to regard the benefit of any particular Stakeholder Interest or group of Stakeholder Interests as more important than any other.
(4) Nothing in this Article express or implied, is intended to or shall create or grant any right or any cause of action to, by or for any person (other than the Company).
(5) The Directors of the Company shall for each financial year of the Company prepare a strategic report as if sections 414A(1) and 414C of the Companies Act 2006 (as in force at the date of adoption of these Articles) applies to the Company whether or not they would be required to do so otherwise than by this Article.

9. The impact assessment
The business is assessed against a set of standards which measure its overall impact on its stakeholders
These are:
governance
workers
communities
environment and
customers
Need to score 80 out of possible 200
Test repeated every two years

10. The declaration of interdependence

11. B Corp – a certification, not a legal form
Just as social enterprise is not a legal form, nor is B Corp
CICs, community benefit societies, co-ops can all be B Corps too
Charities and public bodies cannot
Certification like Fair Trade, Forest Stewardship Council, LEED
About customer confidence and independent assurance – and in respect of the whole business
And different from benefit corporations (though similar)

12. B Corp status – what you get for your money
Fourth element to B Corp status – fees
Apply on a sliding scale
B Lab (UK) identifies the following benefits: 
Attracting investors
Protecting the company mission
Attract talent and build trust
Trade with like-minded businesses
Benchmark and improve performance
Appeal to ethical consumers
Build collective voice
Lead a global movement
Join a community of leaders

13. B Corp – how it feels
Has given a collective name and shape to what many thought individually previously
Surprisingly strong positive reaction across the firm (and personally)
Impact assessment as learning oppportunity
Great networking opportunities
Great company to be in

14. So what difference will it make?
Has Momentum
Is of the Moment
Built on Metrics
Is interesting Money
Mission driven
Another welcome intervention towards the economy becoming a social economy

15. David Hunter d.hunter@bwbllp.com 020 7551 7684
Contact Details
David Hunter