Learning from the B(enefit) Corp Assessment
The Ian Martin Group, a 50-year old, family-owned recruitment services firm, recently became one of Canada’s Founding B Corporations. In this post, Executive Vice President Tim Masson describes the first steps on Ian Martin Group’s journey to becoming a B Corp, and the lessons learned along the way.
B Corps describe themselves as “a new type of corporation which uses the power of business to solve social and environmental problems.”
So where does The Ian Martin Group fit into this strange new world? I found the following chart helpful in thinking about the kinds of organizations populating this brave new economy. Traditionally, Ian Martin would sit in the 2nd category on the right. By becoming a B Corp, we are moving toward becoming a “Socially Responsible Business.” In other words, ‘social responsibility’ will become part of our operating DNA, not just a description of how our economic outputs are distributed.
Given that we’re an old company, just beginning to move along the spectrum, I thought it would be interesting to look at our initial score on the B Impact Assessment to see what we could learn. I found some of the questions incredibly insightful and challenging. Even companies that are not considering certification could learn a lot by taking the free two-hour assessment. The B Corp guys appear to have done some heavy research putting this together. Quick disclaimer: there is more to becoming B certified than scoring a minimum of 80/200 on the assessment. You have to have your results verified by supporting documentation, make a change to your Articles of Incorporation, among other things.
Below is our initial result from the online assessment:
Phew, we passed. It would have been nice to have more breathing room, but “you can’t manage what you can’t measure” – that’s the beauty of B Corp’s scoring system. I’m actually pretty proud that, after 50 years in business, we qualify as a “Certified B Corp” without changing a thing. However, a score of 88.2/200 presents an opportunity: nowhere to go but up!
Unlike in grade school, a score over 60% on any section of the B Impact Assessment is considered an “area of excellence”. The “Governance” section looks at pretty basic issues like your mission statement, board structure, financial controls and auditing. However, one question I found particularly challenging was: “What portion of your management is evaluated in writing on their performance with regard to corporate social and environmental targets?” I guess any company claiming to be a B Corp should answer 100%. For now, we answered 0%. This is just stuff that most 50-year-old companies haven’t thought about yet. But how valuable is it that someone is now thinking to ask?
The “Transparency” category is interesting. We’ve been making strides in this area but as you can see, scored only 46.2%. I’ve been talking to different stakeholders about their feelings on this topic. If you ever want to see lawyers and accountants squirm, tell them you’re thinking about adopting an “open book financial management” process when you’re a private company. It’s quite fun. The truth is, we probably won’t change our existing practice anytime soon, but I would be very interested to hear from other private companies that have considered doing so. If you happen to know any, comment below or get in touch with me on LinkedIn.
I figured that “Workers” would be one of our stronger categories. Most of the questions are HR-related items that our team has diligently addressed over the years: medical benefits, vacation/leave, performance reviews, market-rate compensation, etc. However, as a family-owned business, we didn’t score well in “Worker Ownership”. This is one rating that will likely remain static.
One of the most interesting questions in the “Workers” section is: “What multiple is the highest compensated individual paid (inclusive of bonus) as compared to the lowest paid full-time worker?” The options for this heavily-weighted question are: >20x / 16-20x /11-15x / 6-10x / 1-5x. In this era of golden parachutes and CEO bonuses, it’s cool to know that we fit into the second lowest category.
This is where the going gets tough. Honestly, I would have expected to fare better in the “Community” section than we did.The sections on “Suppliers” and “Local Involvement” deal mostly with policies around choosing local, mission-aligned suppliers wherever possible. I believe we can raise these scores significantly within a year. Again, these are issues we just haven’t thought of before – though they totally make sense.
Several of the questions in the “Diversity” section will be difficult to address quickly. The assessment focuses heavily on whether “underrepresented populations” are reflected in ownership and management of the company. Our overall employee-base is continually becoming more diverse; however, we still need to improve our management diversity over time. The “Job Creation” and “Civic Engagement” sections contain several questions that prompt insights on how companies can create opportunities and share innovations to improve the local and global community. There will be much action taken on this front, and pages of blogs to fill, so I’ll leave it short for now.
At Ian Martin, we have several environmental initiatives underway, but do not yet have a comprehensive strategy to address our footprint – hence the relatively low score. I believe this can be vastly improved within 2-3 years. As a service business, we have a lighter footprint than our manufacturing cousins and therefore more low-hanging fruit.
This B Impact Assessment is just the first step along a new journey for The Ian Martin Group. We will need ideas and action from a full range of stakeholders to continue moving forward. Please comment below if you have any thoughts or ideas. All feedback, positive and negative, (in prose or in poetry) is welcome, as it helps move the dialogue forward.
Ian Martin was officially certified in December 2011. Their B Impact report can be found on the B Corp website.
All images courtesy Ian Martin Group.
