Do B Companies’ boards of directors have their own characteristics?
By definition, B Corps have a three-dimensional DNA, being concerned not only with economic results, but also with social and environmental matters. Traditional boards of directors assume a fiduciary duty that is related with loyalty and care: loyalty, by treating every shareholder in equal conditions; and care, by safeguarding their economic interests. Therefore, the success of a traditional company is measured by the economic value provided its shareholders or owners.
On the other hand, B Corps measure success using a wider array of long-term indicators, since elements relating to social and environmental welfare are incorporated into the economic variable and their impact necessarily becomes apparent over a longer period of time. Here, the demand for loyalty and care must explicitly integrate those three dimensions and their boards of directors are responsible for incorporating a particular tone in the culture of the managed organization and ensure consistency with the principles involved.
How can this purpose be achieved?
B Corps have structured their boards of directors in the traditional manner. They are made up of five to nine members who meet every month and whose agendas do not differ from the common corporate practices. In addition, they share the common belief that making a good board of directors considers habitual standards, beyond the fact that the company they manage declared as their purpose to not only maximize shareholders’ profits but to leave their mark at the social and environmental levels as well.
Now then, the functioning of a board of directors is measured by its ability to safeguard the particular purpose of the company and to orient its strategic decisions. This exercise is done in a collegiate manner in order to input multiple points of view and foster interaction of its members through foresight capabilities, which are complementary to those of the general manager, oriented to action. The understanding of the functioning of the board of directors as a high performance team, obliges its members to interact in such a way that each one must personally know from where the other board member speaks and observes and where the reciprocal confidences allow to share their points of view to anticipate. In this space of conversation personal vulnerability becomes an attribute for creating collective intelligence.
To achieve this kind of functioning, a board of directors requires time and resources. Accordingly, I believe that the directors of B Corps that, generally are not abundant in resources, must consider having a reduced number of board members.
Today this is far from reality since the B Corps, the same as many traditional companies, have transformed the own space of the board of directors for convoking professional with the ability to generate networking, relationships or to gather financing, for example, changing the scope of the corporate government for executive committees that respond to short term needs.
The coherence of being a B Corp gives more responsibility to its board members who, apart from being legally accountable to their shareholders in relation with the financial results, must take care that the organization generate a strong impact socially and environmentally.