First, I thought “nothing.” Then, I realized that they do have something in common: I am a customer of both. I have supported several campaigns on Kickstarter over the years and I (well my wife and I) own a Volkswagen Jetta Sportwagon Diesel. The only other thing they have in common is that they were both in the news this weekend. Kickstarter announced that it is restructuring as a B Corp to require social and environmental considerations to be weighed equally against profits as a measure of its corporate responsibility. Volkswagen of course announced that its only measure of success was profits to shareholders, at any cost.
The irony here of course being that I always expected to be defrauded eventually by someone on Kickstarter.
So what is a B Corp and should Volkswagen become one as penance?
Generally speaking, the “B” stands for “Benefit” and there are two basic types.
First, Certified B Corporations. Some companies seek certification as B Corporations. These are otherwise ordinary companies that pay annual certification fees, agree to a Declaration of Interdependence, obtain shareholder consent, agree to onsite reviews by the certifying agency, obtain a 40% score on an impact assessment, publish the results of the assessment, meet any legal requirements in the company’s state of incorporation, and adopt the following type language in its operating documents:
shall give due consideration to the following factors, including, but not limited to, the long-term prospects and interests of the Company and its members, and social, economic, legal, or other effects of any action on the current and retired employees, the suppliers and customers of the Company or its subsidiaries, and the communities and society in which the Company or its subsidiaries operate, (collectively, with the members, the “Stakeholders”), together with the short-term, as well as long-term, interests of its members and the effect of the Company’s operations (and its subsidiaries’ operations) on the environment and the economy of the state, the region and the nation.
Second, Companies with a B Corp Structure. A B Corp (I didn’t align the letters that way on purpose, I swear) may be a legally recognized entity in states where there is legislation recognizing them. Currently, there are 31 states with legislation recognizing benefit corporations. These companies are otherwise typical corporations or LLCs that have adopted additional legal requirements that are typically very similar to the requirements for certification above, except that there is no independent review or certification required.
So on the one hand we have Kickstarter, operating a platform that must be very difficult to police for honesty, pledging to provide transparency on the public good it is effecting.
And on the other hand we have fahrvergnügen (driving pleasure), or perhaps now betrug vergnügen (was fun) cheating on the very standards it touted to sell its cars.
I’ve started a petition for Volkswagen to become a public benefit corporation and to be required to consider the social and environmental consequences of its actions in addition to profits. Please sign the petition here.
Sorry, this became a bit of a rant.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
