You have heard of S Corporations and C Corporations. Meet B Corporations:

B Corporations^™ are a new type of corporation that are purpose-driven and create benefit for all stakeholders, not just shareholders.
B Corporations^™ are unlike traditional responsible businesses because they:

• Meet comprehensive and transparent social and environmental performance standards.
• Institutionalize stakeholder interests.
• Build collective voice though the power of a unifying brand.

The founders of B Lab, the promoter of B Corporations, are Jay Coen Gilbert, Bart Houlahan, and Andrew Kassoy, and they describe their idea in a podcast of the Stanford Entrepreneurial Thought Leaders.

At root, this is nothing more than a certification. For the corporate lawyers in the crowd, however, the most interesting part of this idea is the requirement that certified B corporations hard-wire their social responsibility into their governing documents. This is from Bart Houlahan:

It's really kind of cool. We have found a way to expand the responsibilities of corporations to include more than just shareholders. That in their day-to-day operations, an organization must take into consideration a broader set ... employees, community, and environment.

Yeah, cool. But not new. Compare Easterbrook and Fischel writing almost 20 years ago (and the idea wasn't new then):

If the New York Times is formed to publish a newspaper first and make a profit second, no one should be allowed to object. Those who came in at the beginning actually consented, and those who came in later bought stock at a price reflecting the corporation's tempered commitment to a profit objective. If a corporation is started with a promise to pay half of the profits to the employees rather than the equity investors, that too is simply a term of the contract. It will be an experiment. We might not expect the experiment to succeed, but such expectations by strangers to the bargain are no objection.

Despite the condescension in the foregoing passage, I think the idea is interesting for a couple of reasons. First, Vic would see some of his prior work in this exchange from the podcast:

Debra Dunn: What do you think these founding B corps hope to get out of this?
Bart: I think there's a couple things. The first and most obvious is differentiation.

So the governing documents of B Corporations are influenced importantly by branding considerations. As I noted in my comment on Vic's second branding article:

Victor Fleischer is after something completely different from transaction cost economization. The branding effect is not aimed at reducing the potential for opportunism by a counterparty to a contract, but rather at increasing the attractiveness of a product to present and future users, or at improving the image of a company in the eyes of regulators, judges, and juries.

But there's more. Remember that Bart said "there's a couple things" companies wanted to get out of B Corporation certification. Back to Bart:

The second element is that legal component we were talking about. What that legal component allows a business to do is to make sure that the mission that is so central to the organization is maintained over time. Because that legal framework can withstand new employees, it can withstand new management, it can withstand new investment dollars, and it can even withstand a change of ownership. So you are in fact baking into the DNA of the business this social mission. And if you talk to those entrepreneurs, that's incredibly critical to them. It's who they are. It's why they started their business. To know that it's going to last over time and not going to be dependent on that innovative inspirational leader ... that's really important to them.

Bart has very quaint notions about the persistence of legal documents. It's very endearing.

But putting that to one side, you will notice, because I bolded it, the statements of identity embedded in this explanation. You can read more about the concept of identity in contracts here.

Finally, listening to this podcast prompted me to accept an invitation to participate on a panel entitled "Toward Sounder Corporate Governance and Financial Regulation" at the National Convention of the American Constitution Society for Law and Policy. My role, according to the invitation, is to provide "balance," which I understand to mean that I will be opposing the views of the other panelists. My hunch is that B Corporations could provide an fun point of departure for that discussion. In any event, my views on corporate social responsibility are already quite public, most recently in my forthcoming essay on The Dystopian Potential of Corporate Law.

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