New Report Reveals Benefits of Worker Ownership for Mission-Driven Businesses That Serve As Leaders for the Next Generation
The mission at the heart of Certified B Corporations is using business as a force for good by considering a broader-than-normal range of stakeholders: workers, community, environment and customers. Employee-owned companies take this a step further by empowering workers as decision-makers for their business and the people and planet around them.
A new report on mission-driven, employee-owned firms finds that these businesses outperform conventionally owned firms in overall environmental and social impact while tackling global challenges that threaten climate and community. The businesses include many well-known B Corps including Eileen Fisher, King Arthur Flour and New Belgium Brewery.
“These mission-led employee-owned firms represent next generation enterprise design,” says Marjorie Kelly, co-founder of Fifty by Fifty, an initiative of The Democracy Collaborative aimed at growing employee ownership. “These companies are designed to meet the challenges of the 21st century: ecological crises and growing wealth inequality.”
Good Numbers, Greater Influence
In Fifty by Fifty’s new report, Mission-led employee-owned firms: The Best of the Best, the numbers tell the story of the benefits of employee ownership. B Corps that are employee owned have:
- B Impact Assessment scores that are almost 20 points higher than non-employee-owned B Corps and nearly 60 points higher than benchmark U.S. businesses.
- Environmental scores three times better than benchmark businesses.
- Worker scores twice as high as their B Corps peers.
Plus, 82% of these employee-owned B Corps were named Best For The World, compared to 42% of all B Corps, as they strive for measureable, positive impact improvement.
But the benefits of employee ownership extend far beyond higher assessment scores and annual honors. Sarah Stranahan, lead researcher for Fifty by Fifty, says these future-minded B Corps are doing transformative work that will help reshape the global economy at a crucial time.
“Mission-driven employee owned firms are here on the curve, designing and scaling new thriving and resilient systems,” she says.These B Corps care about profitability, she says, but are not designed to maximize profit at the expense of other all other goals.
Stranahan says these businesses are diverse but also can be viewed as a coherent group.
“We think that these businesses, individually and collectively, are doing something very important,” she says. “They are demonstrating that businesses that care about their employees, care about the environment, and care about their communities, can succeed.”
Models for the Next Generation
Representatives of B Lab and many of the B Corps mentioned in the report (find a full list at the end of the article) participated in a Next Generation Enterprise event and roundtable discussion earlier this week in conjunction with the report’s release.
Andy Fyfe, who works in business development for B Lab, says he and others who attended the event realize the opportunities of employee ownership and the leadership role these companies can seize.
“B Lab hopes to introduce a new operating system that supports a more inclusive economy,” he says. “For this change to be durable, we need to re-imagine ownership structures. The patterns of aggregated wealth in the hands of few need to change and be deployed toward mutual benefit, especially to employees. We hope to see more B Corps and other purpose-driven businesses move toward steward ownership and become benefit corporations so that companies don’t need to stay small to stay mission-aligned.”
To address the world’s most pressing problems — including income inequality and the climate crisis — business cannot wait for government or nonprofit organizations to act, Fyfe says.
“These businesses need the opportunity to have a mission greater than purely maximizing profit,” he says. “Offering new ways to restructure ownership reaffirms the paradigm shift we’re seeing that business can be more resilient with a more durable and long-lasting mission.”
The report is part of Fifty by Fifty’s ongoing work to transform the U.S. economy by growing employee ownership. Bringing these companies together for discussions and other events helps them share ideas and collaborate to build the movement, Stranahan says, and realize the importance of their “courageous moral leadership.”
“Most businesses operate with a single purpose: making money,” she says. “These companies have elected to raise the bar, to add to this the goals of employee well-being, environmental sustainability and community benefit. … Ultimately they decided it was the right thing to do. And we all know the right thing and the easy thing are rarely the same thing.”
This article was originally published by B the Change.
