In defense of mission-driven businesses
This post originally appeared on CSRwire.
Law School professors Anthony Page and Robert Katz want us to believe that “a hybrid legal form is neither necessary nor sufficient to maintain a social enterprise,” and that all B corporation members, L3C Corporations, Benefit Corporations, and Flexible Purpose Corporations are merely exercises in ‘political entrepreneurship,’ and have wasted a lot of time, effort and money, as they write in their recent Stanford Social Innovation Review article.
Furthermore, they say that “when a (corporate) form has been enacted in one state, it is available to residents of every state” suggesting that all State legislatures have wasted taxpayer time, effort and money in enacting these structures. We could have had a Social Enterprise Delaware-style state (provided we need the hybrids in the first place) to maintain the aspirations of social enterprises.
Ben & Jerry's was sold to Unilever 11 years ago. So why is there still so much emotion attached to the deal?
Ben & Jerry: A Tough Journey
The B Corp team, unsurprisingly, took offense to the article as did Jim Steiker, Meadowbrook Lane Capital’s lawyer at the time. Meadowbrook Lane Capital was quickly formed in 2001 to avert the takeover by social investors as an alternative to Unilever. At that time, I was CEO of Meadowbrook.
Even though Jay Coen Gilbert and the B Corp team suggest that, “the primary objective of the benefit corporation is to enable mission-driven businesses to be built to last and scale with their missions intact, not to entrench individual charismatic leaders," most of these mission-driven businesses rely on the passion of leaders.
And a great leader knows when to pass the torch. We have been struggling with legacy strategies for mission driven companies as long as we’ve been talking about mission-driven companies.
Let's return to the story of Ben & Jerry's however.
The duo together created a brand with an emotional attachment that rivals Harley Davidson – absent the tattoos. Isn’t that what all brand managers strive for? Today, I am CEO of CSRwire. One of the reasons Meadowbrook Lane Capital purchased CSRwire was to build a digital media property as a ‘private stock exchange’ for mission driven companies, along with its fundamental business model of, distributing, archiving and interacting with news on these subjects.
A Mission-Driven Company: Where to Next?
Our plans were to take the publicly traded security of Ben & Jerry’s and convert those shares to a private security and trade them along with other mission-driven companies’ stock. Unilever offered to provide us the financing for the transaction in the form of a ‘loan’. That never happened.
But, the idea had merit and Mission Markets is attempting to revive the initial idea of a trading platform.