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B Corps to CEOs: Get to work

ImpactAlpha, Aug. 26 – CEOs of Ben & Jerry’s, Danone, Sundial Brands, and 30 other certified “B Corps” called in a full-page ad in The New York Times for Business Roundtable CEOS to “work together to make real change happen.” Last week, nearly 200 CEOs declared their support for a new ethos of “stakeholder” capitalism that includes customers, employees, communities and suppliers, as well as shareholders.

  • Resistant investors. B Corp CEOs also called out “continued resistance” from investors on the new definition of business. The Council of Institutional Investors, for example, came out in opposition to the Business Roundtable’s new statement of corporate purpose. To achieve long-term shareholder value, the Council said, “it is critical to respect stakeholders, but also to have clear accountability to company owners.”
  • Shareholder stakeholders. “No question that our best hope in the capital markets is aligned investors who can lead the (Council of Institutional Investors) to a better place,” tweeted B Lab’s Andrew Kassoy. As long term universal asset owners who need the whole economy and society to function well in order to meet their beneficiaries’ needs, this is more in their interests than anyone’s!”
  • Accountability. The Council, which supports efforts at shareholder engagement, argued the new pledge diminishes shareholder rights, “while proposing no new mechanisms to create board and management accountability to any other stakeholder group” (see, “Corporate accountability is key to the success of ‘stakeholder capitalism’). B Corp certification, along with separate state-registered “benefit corporations,” provide mechanisms to make corporations more accountable to stakeholders, including shareholders.

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