WHAT DOES IT MEAN TO BE SOCIALLY RESPONSIBLE ANYWAYS?

Socially responsible corporations became visible to the public in 1991 after the formation of the Social Venture Network ("SVN") and Business for Social Responsibility ("BSR"). Many people consider Ben & Jerry's the first "socially responsible" company through their introduction of the environment as the second bottom line. The notion of a double bottom line reflects the understanding that a company is not merely created to make a profit, but should also account for possible deleterious effects on the environment. Despite Ben & Jerry's novel addition of a second bottom line for measuring corporate success, the lack of guidelines for properly treating employees and subcontractors jeopardized the reputation of green companies as socially responsible businesses. As a result, in 1994, John Elkington added a new, third bottom line that focused on serving 'people' in addition to the planet and profit. This triple bottom line business model maintains fair and equitable business practices toward their employees, the community and the region in which a corporation conducts business.

During the emergence of triple bottom line companies, the term corporate social responsibility ("CSR") entered corporate dialogue. CSR is generally defined as an ongoing commitment by business to behave ethically and to contribute to economic development while demonstrating respect for people, communities, society at large, and the environment. However, the lack of a concrete definition has inevitably created a wide spectrum of interpretation. Muhammad Yunus, the 2006 Nobel Peace Price recipient, suggests that CSR companies take two basic forms: weak and strong. A weak CSR company has the motto: "Do no harm to people or the planet unless that means sacrificing profit." On the other hand, strong CSR companies are focused on doing good for people and the planet but not at the expense of a decrese in revenue. Yunus claims that the idea of CSR is ineffective and instead, advocates for a completely new entity, which he calls a "social business." A social business is a corporation that has the underlying objective to create a social benefit for those whose lives it touches and is cause-driven rather than profit-driven. Essentially, it primarily acts as a change agent for the world.

Yunus' model of a social business is similar to what Fourth Sector Network coined as a "For-Benefit corporation." For-Benefit corporations are a new class of organizations driven primarily by a social purpose. Unlike for-profit corporations, which are created solely to make a profit, For-Benefit corporations are econimically sself-sustaining and seek to be socially, ethically and environmentally responsible. The Fourth Sector community has agreed upon the ten essential characteristics for a For-Benefit corporation which I list on my website.

Because a For-Benefit corporation seeks to benefit stakeholders as well as shareholders, there is a risk that directors could be held liable for breaching their fiduciary duty to maximize shareholder profit. Although some legal scholars claim that a corporate director's only objective is to sustain monetary growth for the company and, as such, to increase company and shareholder value, courts have generally allowed directors to favor non-shareholder constituencies as long as it does not have a significant impact on shareholders. Currently, jurisprudence seems to suggest the court will be especially deferential when directors claim to have altruistic purposes that benefit the company because of the possibility that shareholders will eventually receive a higher return on their investment in the future.

The world is facing a radical transformation on an economic, social and personal level and much is left to be discovered in the legal and corporate arena. Eventually, For-Benefit corporations will be the new form and definition of social responsibility, but must work is left to be done to enact such a legal entity. Despite the long road ahead, I am confident that with each corporate decision made with the intention to create social benefits for those with whom it interacts,the world as we know it will never be the same.