A benefit corp sits in between a non profit and a C Corp. A benefit corp still has a goal to make profits, but it also has other social and/or environmental goals that the company must adhere to. Those goals have some kind of social impact and the company is required to publish to their shareholders the impact of those goals. In other words, they are legally obliged to give back to society. This is a wonderful idea. What happens with a company when the founder dies or new management takes over? Typically the company regresses from its original purpose. With a benefit corp, the company would still be legally bound to pursue its founding beliefs. In current society, an organization must be able to survive and sustain itself. I’ve thought about starting a non-profit many times, but I was never happy with the fact that the only way to sustain itself was to beg other people for donations. I’d rather bring projects to life that could sustain profits through products and use those profits to help improve our world. Of course not all organizations are alike and non-profits are the ideal type of organization for many cases. For a benefit corp to work, you have to have a business model that makes profit, and you have to have the will to be socially responsible.
I think Apple would improve the world by reincorporating as a benefit corp. Since Tim Cook has taken over as CEO, he has been been vocal in Apple’s role in the world. Part of their mission is to leave the world better than we found it. They publicly publish reports on factory conditions, remove as many toxic compounds from their products as possible, made a public commitment to diversity, purposely building products that protect our privacy. Apple incorporating as a benefit corp would cause many other corporations to follow their lead and try to improve the world. I don’t mean to say apple is the only company that could influence this kind of change. Obviously if other large corporations like google, IBM, microsoft,walmart,etc reincorporated as benefit corps, they would also lead the way for other companies to follow. I single out apple because they are one of the largest corporations in the world with a global brand and a public mission to make the world a better place.
It seems that in world too many companies are optimizing strictly for profit at the detriment of our planet. Volkswagen recently just got caught with software installed in their cars so they could avoid complying with federal emissions regulations. Factories dump chemicals into rivers without regard to the environment. Why do these companies do this?
I know for the next idea I want to bring to life, I will register as a benefit corp.