The Rise of the Benefit Corporation: Bringing More Sanity, Sustainability, and Success to Big Business

John Montgomery Conversations, Leadership, Money, Perspectives, What Now 1 Comment

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In a world where corporations often act like psychopaths and seem steered by barely more than greed and avarice, is it possible to transcend their sociopathic pursuit of profit and bring more care and consciousness to our economic system? Listen as corporate lawyer and conscious business leader John Montgomery explains how we arrived at the corporate oligarchy in which we now find ourselves, and how we might be able to steer ourselves toward a more sane and sustainable future.

The world is changing at a staggering rate. What’s more, the rate of change itself is continuing to accelerate. We suddenly find ourselves beset on all sides by multiple failures of political, economic, and social institutions struggling to keep pace, causing unprecedented disruption in nearly every corner of our lives. After all, it is only when our shared anxieties hit a collective breaking point (whether real or perceived) that we see populists like Donald Trump arise.

We’ve clearly hit that breaking point.

As economic, social, and geopolitical disruption continues, and as the dangers and opportunities of that global disruption become more and more palpable, it becomes increasingly important for us to take careful inventory of the structure, form, and moral basis of each institutional pillar on which our civilization rests. Modern corporate governance is one such pillar, forming simultaneously the basis for the most powerful expansion of human wellbeing in the history of the world, as well as a fairly well-diagnosed sociopathy that may be doing as much harm as good in the twenty-first century. How is that otherwise decent and ethical people become embedded in a corporate system that is constitutionally predisposed to sociopathic behavior, and where “competition" quickly becomes a race towards moral bankruptcy?

To find out we talked to John Montgomery, one of America’s preeminent corporate lawyers, long-time integral thinker, and author of the book Great From the Start: How Conscious Corporations Attract Success. John has made it his life’s mission to advocate for a bold new approach to corporate leadership and culture that prioritizes environmental and social responsibility as much as maximizing profit. Which really isn’t as pie-in-the-sky as it may first sound: as John argues in his book, not only is this approach more sane and sustainable–it is ultimately more profitable as well.

Listen as John and Robb discuss:

A Brief History of Corporate Governance

In the early days of America’s founding, corporations were closely regulated by a state legislation that, by and large, kept them on a short leash, which effectively functioned as an externalized conscience for these entities. But with the rise of free incorporation and limited liability, that regulation eroded over time, leaving corporations with no systematized moral compass. The Founding Fathers could never have seen coming the rise of transnational corporations that transcend the laws of the nation-state and paved the road to our current state of corporate oligarchy. As such, as a society we’ve never fully contemplated the philosophical question of what the rights and moral responsibilities of our corporations should actually be, let alone encoding those rights and responsibilities into law. Which means that much of today’s social and economic pain is the result of an outmoded, centuries-old legal architecture that is unable to hold these social entities accountable to promoting the general welfare of society as much as their stockholders.

The Rise of the Benefit Corporation

Speaking from his experience deep within hundreds of board rooms in Silicon Valley, John makes a strong case for the new evolution of corporate governance — what he calls the “Benefit Corporation,” a corporate governance movement sweeping the country of which that John has been one of the foremost leaders—arguing that, if corporations began operating with a “triple bottom line” approach (profit, people, and planet), they would become far more sustainable, and ultimately much more resilient and profitable over a longer period of time.

What Millennials Are Looking For

Millennials seem divided into two extremes in terms of what they are looking for in their careers. Many millennials are looking for meaning in their work, and the idea of working for a faceless corporation that only seeks to maximize profit is not very appealing. Others, however, have taken ideas like The 4-Hour Work Week and The Lean Startup and other highly efficient capitalist models to heart. "Benefit corporations,” John maintains, is one of the few approaches that actually brings both of these streams into coherence.

The Challenges and Opportunities of the Trump Era

Donald Trump is the ultimate wild card, and no one can predict what kind of effect his highly disruptive administration will have upon our social, economic, and political futures. It is certainly possible that he will surprise us all, fulfilling his projected image as a working-class populist and cutting against the small-minded extremism that he currently appears to be surrounded by. Or, perhaps he will follow those ideologues back into the 19th century, and his national failures will themselves become fertile soil for the emergence of bigger, better, more capable institutions in the future.

Either way, one thing is becoming increasingly clear—so much of this actually falls on OUR shoulders, and is calling us to become far more informed and engaged citizens. We are beginning to wake up to the inherent fragility of modern civilization—a fragility that is very easy to take for granted when we are saturated by media and creature comforts.  We are beginning to demand that our governing institutions grow up in order to meet the dangerous complexities of our time, allowing them to hold corporations accountable to the basic ethical standards necessary for them to clean up and come into greater alignment with the greater social good. And most importantly, we are being called to show up in every facet of our lives, taking more civic responsibility for the direction our nations are heading in while playing a far more active role in that unfolding.

About Great From the Start: How Conscious Corporations Attract Success

"Great from the Start" not only prepares entrepreneurs for success in the prevailing economic paradigm where the corporation exists solely to maximize profits for shareholders, but also shows you how to design your business for success in the emerging economic paradigm in which corporations exist to optimize both good and profit. You will learn how to build a purposeful and soulful business that is a force for good and reflects your values, embodies the tenets of Conscious Capitalism as a Certified B Corporation and acts appropriately as a responsible global citizen. Finally, if you are a leader who aspires to operate from the heart, believes in abundance and plays power with instead of power over, "Great from the Start" suggests how you can leverage neuroscience and the science of consciousness to inspire and lead your corporation so that it is optimized for the people that work there.

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The What NOW Conference
December 29 - January 1

Welcome to the era of disruption.

It seems clear we are heading into one of the most disruptive periods of human history the world has ever known. And even now, what we currently see is just a hint of the incredibly disruptive forces that are waiting just behind the curtain — automation, genetics, artificial intelligence, etc. — ready to descend upon our civilization and force us to discover new strategies of coexistence.

But of course, in these times of rampant disruption there is also newfound opportunity for fresh ideas to emerge, to replace outmoded ideas that are generating an enormous amount of evolutionary friction, and to begin reshaping our notions of the world, our work, and our shared future.

This is why we are holding our What Now conference this New Year — to help you navigate and explore the era of massive worldwide disruption that we now find ourselves in, and to discover the inner resiliency and adaptability we need — not only to survive this breakneck era of transformation, but to thrive and actively participate in its unfolding.

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John Montgomery

About John Montgomery

John Montgomery brings three decades of experience as one of America’s preeminent corporate lawyers to offer the business secrets of Silicon Valley as an essential blueprint for any entrepreneur wishing to start a successful company. As counsel and trusted advisor to almost 1,000 startups and dozens of venture capital firms, he developed this blueprint from working with some of Silicon Valley’s most successful companies, entrepreneurs and venture capitalists, and stress tested it with dozens of startups and his successful law firm, Montgomery & Hansen, LLP.

Robb Smith

About Robb Smith

Robb Smith is a leading social entrepreneur in human development. He is co-founder and CEO of Integral Life.