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Finding Moral Certainty for Businesses in an Uncertain World

Rose Marcario  /  aprile 18, 2017  /  3 Minuti di lettura  /  Our Footprint

Our child-care center closes at 5:30 p.m., so families have time together in the evening. Photo: Kyle Sparks

Over the past few months, the business environment has changed dramatically. I’m not talking about trade policy or tax reform, but rather the heightened moral and ethical uncertainty many business leaders now feel at a time when the foundations of our democracy are challenged. New injustices seem to arise almost every day, demanding we speak up and act. It’s often not a business choice, but a human imperative, sometimes it’s both.

Amid all the turbulence, with some courage and careful planning, business leaders now have an inspiring opportunity to fill the global leadership vacuum. Here’s the question on everyone’s mind: How can companies effectively confront urgent moral obligations bigger than the bottom line, while staying focused on business needs at the same time? For many companies, this is uncharted territory.

The burgeoning Benefit Corporation movement provides a clear and dependable path for business leaders who believe business can—and must—be an agent of positive change in our troubled world. Rather than scrambling to respond to daily affronts with little strategy, Benefit Corporations embed their core values directly into their legal charter. As a result, the company can act purposefully at all stages of decision-making, balancing transparency with the need to achieve reasonable financial gain while also taking deliberate action to create additional benefits for multiple stakeholders whenever possible. In other words, Benefit Corporations take real steps to ensure business is good for people and good for the planet. The program eliminates the false choice between making money and doing the right thing.

There are now more than 4,700 legally designated Benefit Corporations across the country.

 

Patagonia became California’s first Benefit Corporation in 2012, which transformed our legal charter and embedded our core values into Patagonia’s foundation forever. Since then, we’ve enjoyed continued growth by all measures. Together, the Benefit Corporation structure and B Corp accountability requirements drive the model’s unique power to improve corporate behavior without sacrificing profit. (Patagonia’s most recent Annual Benefit Corporation Report gives a sense of how this works.)

This is all good news, but it’s not enough. If the business community hopes to succeed in accepting a global leadership role for good, it will require the entire herd, not just a few quirky unicorns. And it can’t take 45 years. Businesses big and small—all of us around the globe—must take it upon ourselves to completely reprioritize how we assess corporate returns. We must transform the conventional business model that currently places profits above all else into a new model that ensures every decision we make as business leaders reinforces our commitment to the environment, our workers, our customers and our communities.

And in the end, profits can and will still be made, perhaps at greater levels than ever before, as in Patagonia’s case. Adopting a long-term outlook when short-term thinking currently rules the day in nearly every C-suite and boardroom (not to mention our broken political system) is not only in the best interest of people and our planet, it’s ultimately in the shareholders’ interests as well, because an economy equipped for long-term success only has room for businesses willing to expand the very notion of a bottom line.

As businesses, we must be vigilant, vocal and, most importantly, willing to take bold action. Becoming a Benefit Corporation presents business leaders with an opportunity for deeply-embedded moral clarity in an uncertain world—and it will pay off in the long term—with greater profit and a better future for people and the planet.

To see what we’ve been up to this year, check out Patagonia’s most recent Annual Benefit Corporation Report.

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