Focusing on the rise of B Corps and Benefit Corporations, Blaine Townsend, CIMC®, CIMA® (Director of Sustainable, Responsible & Impact Investing) sheds light on the shift towards a business paradigm that values employee, community, and environmental well-being alongside shareholder returns.


The role of corporations in society has always been hotly debated. In fact, Thomas Jefferson warned of the “aristocracy of our monied corporations” a century before the Supreme Court granted Southern Pacific Railroad (and, by extension, all corporations) the same rights as a “person.” Today, large companies drive almost every aspect of American life—from environmental outcomes to political influence. But smaller companies also play a huge role in the U.S. economy and labor force. With that outsized influence comes the opportunity to positively impact shareholders, employees, communities, and the planet. Since 2006, the Certified B Corporation™ framework has set out to guide (mostly smaller) companies in doing just that.

B Corps and Benefit Corporations: Understanding the Difference
The Certified B Corp is a manifestation of a broader movement supporting the idea of the “Benefit Corporation.” In short, a for-profit company that works for shareholders, but also makes an explicit commitment to have a positive impact on employees and other stakeholders. The common denominator between a B Corp™ and Benefit Corporation is the shared belief that maximizing profit is not the sole mission of a business.

There is a distinction, however: The Benefit Corporation is a legal status offered in 41 U.S. states and the District of Columbia. It is akin to a C Corp or LLC. A B Corp is a third-party certification that has been granted by the non-profit organization B Lab™. There is a lot of overlap between the two, and in both cases, companies are making it clear the fiduciary duty of its officers and directors also encompasses employees and other stakeholders.

In any state where the Benefit Corporation legal charter exists (like California), a Certified B Corp must also take the step to change their legal designation to a Benefit Corporation as part of the certification. While clothing/gear brand Patagonia is perhaps the best-known B Corp, Bailard, Inc. is one of the newest, having achieved its B Corp Certification in 2023. There are currently nearly 8,000 B Corps in over 90 countries. The movement is growing.

Small Businesses, Big Impact
A company can incorporate as a Benefit Corporation at its outset, or convert later by amending its governing documents and meeting certain legal requirements. Historically, very few publicly listed companies have incorporated as Benefit Corporations (perhaps as few as three). Most, like Bailard, are smaller, privately held companies. That is not a deficit in the power of the B Corp movement, however.
Despite the dominance of large corporations, smaller companies are pivotal in the U.S. economy and its society. According to the Small Business Association (SBA), businesses with fewer than 500 employees account for 99.7% of all U.S. companies. They employ over 40% of domestic workers and have generated over 60% of net new jobs in the U.S. since 1995. Small businesses account for 44% of all U.S. economic activity.

The Power of Certification
In fact, the power of smaller companies to reshape the global economy for a broader set of stakeholders was a foundational piece of B Lab’s founding philosophy. Although the B Corp process is industry-agnostic, B Lab touts that companies in 162 industries have been certified, often in sectors that need it most. An academic study found a positive correlation between the number of B Corps in an industry and the prevalence of “shareholder-centric” policies within that industry, such as high layoff rates or significant pay disparities. The poorer these metrics are, the more likely it is that companies within the industry will pursue B Corp Certification.

For companies already aligned with the B Corp mission, certification is often more about publicly affirming what has been a private commitment to specific values. For Bailard, undergoing the certification process was more like looking in a mirror than looking at a map. As an independent, majority employee-owned, woman-led, majority women- and minority-owned, and community-focused company, the B Corp Certification was an affirmation of the company’s long-standing core values. However, the process does require a willingness to be evaluated publicly. It also provides a structure to codify corporate policies. The process to get certified is not easy. According to B Lab, only 40% of certification applications are successful, underscoring the principle that a B Corp must genuinely “walk the talk.”

Once committed, B Corps have shown a 96% retention rate. However, even for those choosing not to fully complete the certification, B Lab can provide resources. B Lab reported that over 240,000 companies used its assessment tool, which helps companies look at their own practices. At the center of the process is the B Lab Impact Assessment, which requires companies to score at least 80 out of 200 points to be certified, covering Governance, Workers, Community, Environment, and Customers. A fee based on company revenue is paid to B Lab to go through the process. Gathering all the required information and providing the documentation can be daunting and may take a full year.

Demonstrating Real Benefits
Evidence suggests the values attributed to being a Benefit Corporation strengthen a business. For example, during the challenging year of 2020, only 4.5% of B Corps failed, compared to 12.5% of American businesses overall. B Corps also report higher employee retention rates and a competitive edge in recruiting. Additionally, there is a growing number of key professional service firms in the space that want to work with other B Corps. Numerous studies have shown that consumers are very interested in the values behind the brands they buy or the companies they hire. To that end, B Lab provides a search engine for finding B Corps for consumers or business networking.
In an era of “greenwashing,” B Corps have completed a third-party assessment of key employee and sustainability metrics. Being a B Corp gives more gravity to the expressed values of a firm. Multiple studies show that Millennial and Gen Z employees—who currently make up 50% of the U.S. workforce—consider a company’s values when making purchases or choosing where to work.

A Commitment Beyond Profit
The rise of B Corps and Benefit Corporations signifies a shift in corporate philosophy, as it clearly reflects a commitment to specific values. But it is also more than that. It is a commitment to the idea that building stronger ties with employees and more sustainable business practices is the right way to conduct business going forward. Businesses that treat their employees poorly, or ignore environmental or reputational risks, are seldom the backbone of the community or industry outperformers. Nobel Prize-winning economic professor Robert Shiller summed it up well: “The B Corp movement is, to me, a product of a general improvement in our understanding of economic behavior. Through greater appreciation of the real motives that drive and excite people, B Corporations provide a significant new opportunity for investors. I think they could make more profits than any other types of companies….”
This paradigm shift towards more socially responsible and sustainable business practices is not just a trend; it’s the future of business. B Corps and Benefit Corporations are leading the way, proving that success in business can also mean success for shareholders, employees, and society more broadly.


1 The state of Delaware uses the term Public-Benefit Corporation (PCB) instead of Benefit Corporation.

5 Ibid.