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  • Writer's pictureMike Brown

Impact Grove Launches as a California Benefit Corporation

Updated: Oct 5, 2022

On August 4th, 2022, we incorporated as a California Benefit Corporation.

Clause 8 of our Organizational Director Minutes states "The Corporation has been incorporated as a Benefit Corporation, which, in addition to pursuing profits for its shareholders, has duties relating to pursuing goals for its general public purpose (Sustainable Business Solutions and Consultations for Socially Responsible Business Practices) and will need to measure how it achieves such goals, which shall be spelled out in greater detail in the entities governing documents. The Corporation shall cause its officers to take such actions as may be necessary to further and comply with such obligations."

A Benefit Corporation? What's that, you ask? Before we get to that, let's start with a primer on typical entities for companies.

Standard Corporations

Everyone has heard of corporations. Some know the difference between a C-Corp, S-Corp, or Limited Liability Company (LLC).

Standard corporations are legally bound by shareholder primacy to serve one purpose: make as much money as possible for the corporation's shareholders. This often results in the corporation harming people and the planet to squeeze every dollar of profit out of its business operations.

Standard corporations are also legally bound to sell to the highest bidder when acquired. This legally prohibits an owner from selling to a buyer which may be offering a slightly lower price but would be better for the longevity of the company's culture, people, and mission.

Most founders feel an emotional responsibility to do the right thing for their team as they exit, but their corporate bylaws say they legally must only consider maximum shareholder value when they sell. For all but the hardest of hardened CEOs, this can lead to lifelong regret and guilt as they watch the heart and soul of their company be ripped out.

Benefit Corporations

There is a new way of doing business and having a purposeful exit if the owners choose to sell!

Benefit Corporations are the newest type of legal corporate entity. They currently are available in the vast majority of states in the USA, and are also growing in momentum in many countries around the world. What sets a benefit corporation apart from the others?

The legal purpose of a Benefit Corporation is more than just profit for shareholders. The directors and officers of benefit corporations are legally bound to make choices that consider the public good. This gives corporate directors and officers the freedom to do the right thing for people and the planet, instead of only doing what maximizes profit for shareholders.

Directors of a Benefit Corporation may choose to do the right thing for their employees, the environment, and their customers. Every decision does not have to be about short-term profits. With a higher level of responsibility and forward-thinking, Benefit Corporations can build a stable company that adds value to society for the long-term. If the owners of a Benefit Corporation choose to sell, they are not required to accept only the highest bid and can legally choose the buyer based on who they think is the best buyer to continue on with using their business as a force for good.

We Went Further

At Impact Grove, we decided to go even further and specify in our corporate bylaws how we must behave in our business practices. We included thirty two provisions for our company to abide by, and will add to this list as needed:

  1. The corporation will maintain its entity as a Benefit Corporation and actively practice methods to earn and maintain status as a Certified B Corp by B Lab.

  2. The corporation will donate a minimum of 5% of its revenues to non-profit organizations that serve environmental and/or social causes.

  3. The corporation will be a business member of 1% For The Planet.

  4. The corporation will actively hire and partner with owners, executives, board members, employees, contractors, and consultants in the interest of diversity, equity, and inclusion to hire and work with people of color, women, LGBTQ, disabled, and other previously excluded populations.

  5. The corporation will include a statement in all job postings indicating a commitment to diversity, equity, and inclusion.

  6. The corporation will conduct a pay equity analysis by gender, race, ethnicity, and/or other demographic factors and, if necessary, implement equal compensation improvement plans or policies.

  7. The corporation will provide employees with diversity, equity, and inclusion training.

  8. The corporation will have a written community service policy, offer incentives for employees to organize service days and/or volunteer activities, and set goals to increase the percentage of employees who participate.

  9. The corporation will report annually on its environmental and social impact using the B Impact Assessment and/or other measurement from B Lab as its 3rd party standard.

  10. The corporation will actively seek to work with Certified B Corps for vendor, supplier, and partner selection.

  11. The corporation will actively seek to purchase from local suppliers and/or suppliers owned by women, people of color, or individuals from other underrepresented populations.

  12. The corporation will maintain a formal, written supplier code of conduct that specifically holds the company's suppliers accountable for social and environmental performance.

  13. The corporation will bank with a Certified B Corporation, a credit union, a community development financial institution, and/or a member of the Global Alliance for Banking on Values.

  14. The corporation will be an advocate within its industry and within the industries of its clients to develop social and environmental standards.

  15. The corporation will monitor, record, and reduce its greenhouse gas emissions.

  16. The corporation will use energy-efficient lighting systems, office equipment, appliances, and heating and air conditioning systems.

  17. The corporation will use water-efficient systems.

  18. The corporation will use low-impact renewable energy sources.

  19. The corporation will prioritize virtual meetings to reduce emissions from travel.

  20. The corporation will have an environmental purchasing policy for office supplies, food, electronics, cleaning products, product input materials, and other items, as appropriate.

  21. The corporation will responsibly dispose of hazardous waste such as batteries or electronic equipment.

  22. The corporation will integrate its commitments to environmental and social responsibility to its official and publicly communicated mission statement.

  23. The corporation will train its employees on its mission's social and environmental responsibility.

  24. The corporation will tie social and environmental performance to bonuses and other rewards.

  25. The corporation will evaluate employees and management on their performance in regards to its social and environmental targets.

  26. The corporation will solicit from external stakeholders (customers, community members, suppliers, or nonprofit organizations) feedback about its social and environmental performance.

  27. If the corporation maintains a board of directors, advisory board, or other governing body, it will include women, people of color, LGBTQIA individuals, and other under-represented individuals. It will also include nonemployees, community members, and environmental experts. It will review the corporations, social and environmental performance on an annual basis.

  28. The corporation will measure customer satisfaction via the Net Promoter Score or other similar methodology.

  29. The corporation will create specific targets to increase customer satisfaction and have a program to incorporate customer feedback into service or product design.

  30. The corporation will measure, manage, and reduce the potential negative outcomes its service or product may unintentionally create for customers.

  31. The corporation will have a formal, publicly available policy on data privacy.

  32. The corporation will make all customers aware of any data that it collects, the length of time that data is preserved, how it is used, and whether it is shared with other public or private entities.

By forming as a Benefit Corporation and including thirty two guiding principles in our bylaws, we have legally secured our corporate culture to lead the way in the Beneficially Impactful Capitalism movement!


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