I asked Nathan Gilbert of B-Lab why the organization decided not to include a certification requirement in the design of the benefit corporation. One reason, he said, was to avoid the appearance of B-Corp creating business for itself.

Another was to encourage states to adopt legislation making the benefit corporation available. “If we were to put more restrictions in the legislation, it would deter a lot of companies.”

But he’s not worried about compromising the strict standards B-Corp has adopted as part of its assessment process. Gilbert thinks the market will keep companies from selecting a more watered down standard.

“The key element is transparency,” Gilbert told CSRwire. The requirement of putting out a yearly public report will let the market decide:

“The public will be able to see what standard the companies are using and how they measure their performance. That way, they can put better pressure on a company to step it up.”

Elisa Miller-Out agrees. "People will demand this level of transparency and honesty,” she told CSRwire.

“There’s a grassroots movement in business, connected to Occupy Wall Street, that’s resonating with people all over the country that says the standard way of doing business is really hurting us, our economy and our reality. Once people see that the [true triple bottom line] is possible, they are going to demand that of all businesses."

Like other companies that are becoming benefit corporations, Miller-Out expects that adoption of the new form, “company by company,” will build a more vibrant economy and create a healthier environment in the process. “It’s about changing the whole fabric of society,” she says.

Expanding the Benefit Corporation Model

In the U.S., state legislatures are proving receptive to making the benefit corporation structure available – on a remarkably bi-partisan level. Its unanimous adoption by the famously rancorous New York State legislature is emblematic.

Democratic Senator Daniel Squadron sponsored the legislation. “The Republican majority rarely passes Democratic bills,” he told CSRwire. Fear of the unknown often is the greatest barrier to passage, he added, but the benefits of the legislation as proposed were crystal clear. “All the stakeholders understood it.”

In a country where every state has different laws governing corporations, this clarity is a big plus that bodes well for future adoption by more states.

Other countries might also benefit.

B-Lab is currently doing an analysis of the legal framework in certain South American countries (Brazil, Argentina and Columbia) to see if legislation enabling corporations to consider stakeholders, as well as shareholders, is needed.

Depending on the results, B-Lab will determine whether it needs do anything, or promote amending corporation bylaws or new legislation, according to Nathan Gilbert.

In the U.K., Community Interest Companies provides a similar model of considering stakeholder interests along with those of shareholders.

Changing the underlying laws of how business can do business is what changes business overall, says social entrepreneur Andrew Greenblatt. He inspired Daniel Squadron, his representative in the New York State legislature, to introduce the benefit corporation legislation, as I reported last week.

“It’s earth-changing,” Greenblatt told CSRwire. “This is a very big deal.”