We celebrated our first year as a B Corp on 5 November 2022 and we are in the middle of our second B Corp Month this March 2023. One might even call it a “B Day.” Since achieving B Corp status, a lot of our internal processes and strategies shifted in alignment with the certification standards. Not the least notable of the shifts were the changes to Boldr’s Articles of Incorporation towards becoming a Public Benefit Corporation (PBC). This was one of the first formal changes Boldr made as a B Corp certified company.
Boldr was established and registered as “Boldr LLC” in the State of California on 19 December 2016. On 31 December 2020 Boldr’s original certificate of incorporation was filed with the Secretary of the State in the State of Delaware under the name “Boldr Inc.” Companies that register under this structure enjoy certain benefits, such as the ease of incorporation, as well as legal protection over a company’s assets against creditors. Without getting into the legal intricacies related to being a Delaware corporation, this structure was the easiest and most common type of incorporation. Over 60 percent of Fortune 500 companies follow this structure.
Changing our Articles of Incorporation means Boldr takes on more responsibility and more stakeholders to be accountable to including and especially the “public” or society at large. According to Cornell, PBCs “balance stakeholders’ economic interests, the interests of those who are involved and affected by the corporation (such as employees and customers), as well as the advancement of their intended public benefit goal.” To put it simply, the benefits that accrue to Boldr must be equally shared and distributed across its leadership or shareholders, its people, and the community at large.
A critical part of operating as a PBC is a higher level of transparency. PBCs are expected to provide a report assessing the corporation’s promotion of benefits every other year describing the Board’s goals and standards regarding stakeholders, and must specifically include:
- The objectives the Board has established to promote the best interests of stakeholders and the public benefits outlined in the Certificate of Incorporation.
- The standards the Board has adopted to measure the Company’s progress in promoting those interests and benefits.
- Objective factual information based on the standards the Board has chosen regarding the Company’s success in meeting those objectives.
- An assessment of the Company’s success in meeting the objectives and in promoting those interests and the public benefits the Company seeks to achieve.
What are the “benefits” of being a Public Benefit Corporation?
Iron-Clad Mission Alignment
Being a PBC provides a legal structure that allows companies to pursue their social or environmental mission without fear of legal repercussions. This structure ensures that the company’s values and goals are aligned with the day-to-day operations of the business. Especially in outsourcing, PBCs seek out clients who share their values and work to ensure that their labor practices are aligned with their mission. For companies looking to outsource while still maintaining their commitment to social and environmental responsibility, working with a PBC outsourcing partner is one way to ascertain that their governance and labor practices are sound.
Establishing stronger trust and transparency helps mitigate risk
PBCs are required to publish an annual report that details their social and environmental impact. This level of transparency builds trust with customers, investors, and other stakeholders, who can see exactly how the company is fulfilling its mission. It also holds PBCs accountable to their stakeholders, and encourages them to continuously improve their impact. Since becoming a B Corp in 2021, Boldr has publicly released three Impact reports across all channels. Working with PBCs helps companies mitigate risks associated with outsourcing. PBCs are more likely to have strong ethical and legal practices in place, reducing the risk of legal and reputational issues.
Competitive Advantage and Brand Differentiation
PBCs can gain a competitive advantage by differentiating themselves from traditional for-profit corporations. By putting their mission at the center of their business, PBCs can foster customer loyalty and create a strong brand identity. Companies could leverage this exercise to reinvent their brand or to stand out in a crowded market. As consumers become more aware of the impact of their purchases, they are increasingly looking for companies that share their values and prioritize social and environmental responsibility. By working with a PBC, companies can signal their commitment to these values, build a strong brand identity, and attract loyal customers.
Do I have to be a PBC to make a difference?
Even as a Delaware C Corp, Boldr’s inception was designed towards rethinking outsourcing from the start. This means that a company’s legal status doesn’t necessarily predetermine whether they will ultimately be harmful or beneficial to society. While being a Public Benefit Corporation comes with more responsibilities and requires companies to be held to a higher standard, it can provide a range of benefits for companies that want to make a positive impact in the world.
From mission alignment and increased trust and transparency, to leveraging this status as a critical differentiator, and gaining a competitive advantage, there are many reasons why companies should consider this corporate structure or even working with PBCs. By putting their mission at the center of their business, PBCs like Boldr have effectively hardwired itself to create a sustainable and fulfilling business model that benefits all stakeholders.
Glo Guevarra is the Impact Manager at Boldr and she holds a postgraduate degree in Labor, Activism, and Development at SOAS University of London.
