Entrepreneurship@Cornell Celebration 2014
Mission and corporate responsibility
Panelists discuss mission-driven and B-corp businesses in panels sponsored by the Center for Sustainable Global Enterprise.
Good works and good profits are not mutually exclusive. In fact, having a conscience can boost the bottom line while improving a company's status among investors, partners, and consumers, say owners of mission-driven businesses who practice what they preach and who spoke in panel discussions sponsored by Johnson's Center for Sustainable Global Enterprise at Entrepreneurship@Cornell Celebration 2014.
A discussion of "Mission-driven Business: Hindrance or Opportunity for Entrepreneurs?" included panelist Ian Gaffney, co-founder of Emmy's Organics, a natural foods producer that has grown rapidly from a home-kitchen operation in Ithaca to a company whose global clients include Whole Foods Market. He notes that while his cookies and cereal are more expensive than the competition's, "we are using premium ingredients and premium processing that many people are willing to pay for. We have maintained the integrity of our all-organic ingredients, and it has resulted in good customer loyalty."
Integrity is also critical to Jason Salfi, president of Comet Skateboards, a manufacturer that uses sustainable components for its products, such as select woods and environmentally safe finishes. He feels a responsibility to promote those principles, especially in the youth market he serves.
"For us, greener production is the key mission. The hardest decision we have made to date is to move from our original manufacturing facility and partner with a large corporation to maintain growth and upgrade our facilities while not sacrificing that mission," he said. "We have done a technology swap, incorporating our emphasis on sustainability and social responsibility into an operation that increases our output and provides a distribution network that takes our products to a broader segment of the market. With our success as a manufacturer dedicated to green production methods, we can impact the missions of other companies and change market demand for products like ours."
Sustainability is a core belief for Steve Bauman, founder of ThermalCUBE, which produces technology for storing renewable energy off the grid. "For McDonald's and Walmart, the mission is profit. The mission for companies like ours includes fair wages, a cooperative working environment, and using the best components for our products," he said. "We may make decisions that hurt the bottom line but have a positive impact on society, on the environment."
Such goals are typically articulated in businesses that earn benefit corporation, or B corp, status. In seeking B corp registration or certification, business owners state a commitment to pursue interests beyond those of shareholders, including those of employees and the community at large. B corps' directors operate businesses with the same authority as in traditional C corps, in which shareholders' interests take precedence.
"It's a label that lets consumers know you stand for certain values and also tells employees what the company is all about. Shareholders don't necessarily represent a company's mission," said Lynn Stout, a professor of corporate and business law at Cornell, who participated in the panel on "B Corps: What's the Benefit for Entrepreneurs?"
Stout suggests that a focus on share value is a short-term strategy that does not consider a company's future prospects. "Anyone mindlessly pursuing profits is hurting society, even if they have other interests," Stout said.
At Ben & Jerry's, the premium ice cream maker that is the poster child for mission-driven businesses, B corp certification has reinforced the company's philosophy since day one. It also informs the company's new parent firm, corporate conglomerate Unilever, that Ben & Jerry's will continue to promote social justice, environmental protection, and living wage issues, among other causes.
"The sale to Unilever was made because we had a unique agreement: We would maintain our social values in perpetuity," said Jeff Furman, a company founder and current board member. "We kept an independent board of directors that has the right to pursue our social vision."
Stout said maintaining good practices is paying off for businesses large and small. "Conscience has entered the conversation among investors," she said. "While people traditionally think only of their own interests, including their profits, they are now thinking about the social and environmental benefits of their investments, and that is a promising development."