Got a short but thought-provoking snippet to pass along today…
According to the compelling article you’ll find here, written by Will Patten for Harvard Business Review, a pocket of business leaders and legislators around the globe are starting to wonder whether it’s time to create a middle path of some kind between the traditional “selfless philanthropy” mission of non-profit organizations and “profit at all costs” mission of most for-profit enterprises.
One new experiment along these lines, being rolled out in Vermont, is the creation of a new “For Benefit” business classification that “expands the definition of fiduciary responsibility beyond an exclusive obligation to shareholders to encompass the interests of all corporate stakeholders, including employees, the local economy, and the environment.” According to Mr. Patten’s article, these new organizations will be granted “legal protection to make investments with an eye to the long term, aiming for sustainable returns, not fast paybacks for shareholders.”
An interesting concept, for sure! As usual, if you want an even better grasp of the issue being discussed, make sure to scroll down and read some of the comments below the article. These contributors refer to related examples of emerging social responsibility legislation, such as the L3C (“Low Profit Limited Liability Company”) structure now allowed in 5-6 states around the country, while other folks play Devil’s advocate and suggest such alternative business forms will never work, writing things like “for example, the tendency to outsource manufacturing to China may be socially destructive because of US job losses, but if consumers continue to demand the cheapest products, what choice does business have? Any business that sticks with making products locally and charges higher prices accordingly could well be out of business soon. Legislating for such a socially responsible action would just put them out of business sooner.”
Clearly, our society (as well as many Career Horizons clients) are feeling extremely torn these days between the competing interests of “doing good in the world” and “making a decent living” — so it will be interesting to watch how these forces play out on a bigger scale, across the country, a well as across the globe!