By Guest Writer Ellie Coverdale,
Some companies are moving towards becoming public benefit corporations to take responsibility for themselves and give back to society and to their community. Some well-known companies which have become public benefit corporations or simply have a big social responsibility presence are Kickstarter, Patagonia, and more. Incorporating or re-incorporating as a public benefit corporation means that the money the company makes or thinks it will make, will not affect the company’s pledge or mission, whether that’s supporting the environment and grassroots initiatives, funding school projects, or creative outlets.
What is a public benefit corporation?
A benefit corporation is essentially non-profits public benefit corporations, or a mix of a not-for-profit corporation and a for-profit corporation, in that it is a company which still retains the ability to earn profits, unlike a not-for-profit, but it also has to have a firm public benefit, unlike a for-profit corporation. It means that the company, including its key members, can pursue social benefits while also attempting to maximize the profits it makes for its shareholders. Benefit corporations do not have charitable goals as the main target, this remains earning profits, but they can still provide public benefits. Chris Pirlo, a marketer at Bestbritishessays and Boomessays, adds that “these corporations will tend to value not only their financial health but also the social and environmental benefits they can provide. In some areas, they are not only allowed to do this but legally mandated to consider these benefits.”
In this article, we’ll explore a bit more of the reasons why social responsibility should be embedded in corporations.
1. They can have a positive impact on the community.
If social responsibility is at the forefront of a business’ values and mission, it will encourage them to act in an ethical manner and always consider the social and environmental impact that their business may have. As they are considering this, they can act in a way that avoids or reduces the risk of their business having a negative impact on their community. Thinking in this way also leads companies to update or change their core values in order to deliver additional benefits to the community where once they may not have or did not consider it.
2. They will enhance their client relationships.
Having a strong social responsibility profile in the community creates and fosters trust between the business and the clients. Knowing that a business has core values and is willing to defend them and perhaps even sacrifice a margin of profits in the pursuit of this public benefit goal will strengthen the connection between the client and the business, build a new network of clients, and create loyal returning customers. To do this, a company can offer pro-bono or a similar service, or partner with a not-for-profit to share resources toward a common goal.
3. They become an employer of choice.
A public benefit company can become an employer of choice because they have this added feature that will attract and keep highly skilled employees. Marjorie Thomas, a project manager at Best Australian Writers and Revieweal, explains that “public benefit corporations often become employers of choice by offering healthy work-life balances, great working conditions, and flexibility on hours, vacation, and remote work. A social responsibility profile at a company is very attractive to potential employees and recruiters should be sure to use this to their advantage.”
4. They encourage professional and personal development.
A public benefit company has the added draw that their employees can get involved in their community-minded initiatives which means that staff can learn new skills that can be applied to the workplace. Taking on activities that are different from their usual responsibilities gives employees the opportunity to get involved in causes that matter to them, learn about new causes that they may not be familiar with, and expands their horizons. Corporate support for these types of activities means that employees will grow and improve, in turn giving back to the company in terms of employee retention and loyalty.
5. They provide value.
In short, these organizations have public value because they make a difference in the community. Whether this happens indirectly or directly, public benefit corporations undoubtedly add value to their clients, their community, and the planet.
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