Live from British Columbia: The rise of capitalism 2.0?
We’ve seen this before: the West Coast showing the rest of Canada what the future might be. British Columbia’s legislature is the first in Canada to note the rising number of entrepreneurs who intentionally reject shareholder primacy. It’s now debating a bill to support purposeful capitalists, called the Business Corporation Amendment Act, 2018.
The bill would amend the B.C. Business Corporation Act to create benefit companies, which are defined in the bill as being companies that include a “benefit statement” in their notice of articles.
B.C. is following the lead of 33 U.S. states and the District of Columbia that have already passed legislation authorizing benefit corporations.
A movement of entrepreneurs, not lawyers or academics.
What has prodded our West Coast cousins to act? What is this movement?
It’s a movement of real people with fingers and toes and social insurance numbers, not the legal abstraction of companies. Anyone who talks about this movement using the word corporation doesn’t truly understand its nature or power. (Lawyers and academics often do this.)
It’s not a movement of tree-huggers. This is a far bigger gang whose touchstone is purpose. Their first motivation is to build successful businesses that bring broad benefit to their community. Repeat: they are not obsessive greenhouse gas counters; they want to create good livelihoods for people, help create robust communities and be environmentally sustainable.
They’re unapologetic capitalists, not altruistic hybrids. Their motivations haven’t been changed by too much exposure to friends who work at charities—what separates them from most of their business peers is their refusal to be shackled to a narrow definition of success (read: only money). That’s not for them.
They’re aspirational, can-do people, not an abstract “lever” that governments or impact investors can press to achieve some pre-chosen social benefit. Don’t assume B Corp-ers think like standard-issue MBAs. And don’t repel them with a bean counter prescriptiveness or insistence on excessive metrics and data.
Capitalism 2.0: Displacing shareholder primacy
They’re creators, not cleaner-uppers or “give-backers”. These are subtle but critical distinctions. Purposeful entrepreneurs create broad value with their successful companies, and are unimpressed by folks who brag about being responsible, i.e., “See how my company did no harm.” Nor are they like others who don’t question how the money was made so long as it’s followed by giving.
For many, the biggest goal is inclusive prosperity. Employees are people, colleagues, friends and assets to the company, not “cost centres.” Imagine.
Finally, many are found in the second or third generation of family businesses. The young’uns want to be explicit and more rigorous about the positive impact their family firm has.
In sum, it’s a movement of people, each using their business as a force for good. Think of them as a horde motivated by this purpose, plus inclusion and sustainability
The sum of their individual success (and succeeding they are) may well displace the practice of shareholder primacy. In other words, Capitalism 2.0.