Preface (later) by e-Patient Dave –
Casey and I were discussing that one of the obstacles impeding changing in medicine is that by law, corporate officers have to serve their shareholders first, i.e. make money before they get into any do-gooder stuff. The subject of “B Corp’s” came up – a pretty new development in American law. She knows the subject and agreed to write about it. As we think about the future of healthcare we should know this option. Thanks, Casey!
What’s a B Corp, you ask? It’s a new classification for corporations, defined as “certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency.”
I learned about B Corps by being involved with a few nascent B Corps in Virginia, the state where I live. Virginia, and particularly Richmond, are something of a hot-bed of B Corps and Benefit Corporations. B Corps are certified via the social, environmental performance, accountability, and transparency standards mentioned above; Benefit Corporations operate under a general principle of social benefit, vs. the traditional corporate “shareholder value comes first” mantra.
The white paper that planted the Benefit Corporation flag says this about the new structure:
Historically, the U.S. legal system governing corporate entities and their activities has not been structured or tailored to address the situation of for-profit companies who seek to use the power of business to solve social problems.
One local Richmond B Corp, Impact Makers, is a management & IT consulting firm that has a significant chunk of its business in healthcare. They have a few charity partners with whom they share their corporate revenue, which you can read about on their “Our Impact” page. A Richmond public affairs agency, BrandSync Benefit Corporation, is also a certified B Corp. BrandSync’s charity partner is their own 501(c)3, United Virginia, which works to develop entrepreneur education in Virginia.
When fellow SPMer Tracy Zervakis and I started up Patients for Clinical Research earlier this year, we registered with the Virginia State Corporation Commission as a Benefit (B) Corporation. We’ll go through the B Corp certification process once we start seeing revenue.
What’s the point of all this? For those of us with an interest in entrepreneurship as well as advocacy, setting up your enterprise as a Benefit/B Corp would give you the opportunity to make money, and also create social good. Not that creating a 501(c)3 non-profit or foundation to be the vessel of your advocacy work isn’t a good idea – if you’re up for the paperwork involved in an IRS Form 1023, and your primary focus is advocacy alone, go for it.
If you’ve got an interest in creating something – technology platforms, business models, products – that makes participatory medicine resources and tools for consumers or healthcare system providers, you might want to look at setting up your business as a Benefit/B Corp. You can then run as a corporation, without the necessity of creating a non-profit oversight Board of Directors structure. You’ll have a corporate board, as does any corporation. Your “shareholder value” mantra, as a B Corp, would be all about the social good you deliver by your corporate principles, and the revenue sharing you do with your charity partners.
I can even see this as a valid corporate classification for private clinical practices. Doctors and other clinicians who are interested in advancing social good, in addition to their own good (earning a living), would be ideal B Corp founders, in my opinion.
To be, or not to be, B – that’s the question for the entrepreneurs among us. What are your thoughts?