Businesses Working for People, Planet (and Profit)
Last summer, Governor Kitzhaber signed House Bill 2296 into law, which created a new business type in Oregon: the Benefit Company.
What Is a Benefit Company (“B-Corp”)?
A Benefit Company, or “B-Corp,” is a corporation that legally institutes social goals beyond financial profits for its stockholders. Traditional companies are judged only by shareholder return, while B-Corps emphasize social values in addition to shareholder return – such as reduction of carbon footprint, serving the community, diversity goals, and others.
A B-Corp is not a new business structure but rather a new way of thinking about business. It is a designation of existing business types (like LLCs, S-Corps, and C-Corps). In the words of Kate Brown, Oregon Secretary of State:
“The Benefit Companies legislation allows companies to define themselves by more than just the dollar amount per share, but instead by what they hope to achieve.”
Why Become a B-Corp?
Onward Oregon encourages entrepreneurs in our state to convert their existing business into a Benefit Company, and members who patronize locally-owned businesses to encourage those businessses to convert.
Becoming a B-Corp raises the reputational cost of abandoning your social goals. It’s what behavioral economists call a “commitment device”—a way of insuring that you’ll live up to your promises.
Steps to Becoming a B-Corp in Oregon
Here’s how to do it:
- Read ORS 60.750 – ORS 60.770 and decide if becoming a B-Corp is a good option for your company or organization.
- Adopt a resolution in your company’s articles of incorporation or organization that says your corporation or LLC is a benefit company subject to ORS 60.750 – ORS 60.770.
- Adopt a third-party standard by which to be judged. One list of such standards is available here (we chose B Impact Assessment).
- Prepare an annual benefit report identifying:
- The actions and methods you used to provide a general or specific public benefit.
- Any circumstances that hindered or prevented a benefit.
- How well your company met or exceeded the third-party standard.
- Distribute the annual benefit report to your owners and post it on your website (ours is here).
Due to a busy summer for our Board, we’re still finishing the process of becoming a Certified B-Corp by B Impact Assessment, our third-party standard. But thanks to YOUR ACTIONS over the past year, we are confident we’ll pass with flying colors.
There are already 75 companies in Oregon that have become certified B-Corps. Entrepreneurs and business owners, consider adding YOUR company to that list.