What are Certified B Corporations and Why They Matter
Some people think that capitalism is what’s wrong with our world. According to Wikipedia, “capitalism has been criticized for establishing power in the hands of a minority capitalist class that exists through the exploitation of a working-class majority; for prioritizing profit over social good, national resources and the environment; and for being an engine of inequality and economic instabilities.” While that’s not true for every business, for most companies, whether they are scraping by or striking it rich, the focus is on the business itself.
Nonprofits, on the other hand, are supposed to be the alternative structure for organizations that care more about the collective, public, or social benefits. The model was designed to be responsible, honorable, and transparent, but there is controversy about its efficiency and accountability. Resources are not always managed as well as they could be, and efficacy suffers. Nobody goes into nonprofit work to become wealthy, but the trade-off is that they go home at the end of the day with the impression that they’re making a difference in the world.
Does there have to be a trade-off? Can a business do good in the world and still make a decent profit? There are big, wildly profitable businesses whose mission is to provide life-saving drugs or medical equipment, for example, but what do we know of their inner workings? How do they treat their employees? What is their environmental footprint? For-profit companies’ lack of transparency means there is no way to know. This leads us to the question: what if a for-profit company could be held to high standards of accountability, transparency, and verified social and environmental performance?
This is where Certified B Corporations enter the picture. B Corps are organizations all across the globe that have committed to balancing purpose and profit. They are required to care about more than their bottom line. They form a powerful community of like-minded people and companies driven to use their business as a force for good. There is no shame in making a profit if there are no values sacrificed to get there.
The process of becoming B Corp certified is rigorous, as it should be. Organizations must verify that their companies meet high standards in the areas of governance, workers, community, environment, and customers. There is a very extensive evaluation that dives deeply into how companies measure up in each of these areas. There is paperwork to submit to substantiate your statements. There are follow-up questions from a team of individuals whose job is to make sure companies are not fudging their numbers or claims. There is a live interview with a certification team to further confirm that your company makes the grade. Then, once certified, there is a recertification process every three years in which companies must prove that they are not only living up to what they claimed but are encouraged to do better than they were before, and the evaluation questions change and evolve as the standards are further scrutinized in light of new global concerns.
What is even more beautiful about certified B Corps is the community they create. There is a global “B Hive” of articles, resources, opportunities, and ways to connect with other values-driven organizations. There are independent “B Local” groups all over the country comprised of certified B Corporations that meet to discuss issues, network, educate, support, engage, and inspire. There might be community service events, webinars on global issues like climate concerns, and opportunities for learning about other companies, vendors, and professionals that care about their global communities as much as you do.
Personally, it gives me great pride to work for a law firm that chose to jump through the B Corp certification hoops and to live up to those lofty standards. As Milgrom & Daskam’s Legal Administrator, I look to the B Corp member directory first when choosing a vendor for everything from a financial advisory firm to handle our employee retirement accounts (Thanks, BSW Wealth Partners!) to a bakery to provide cupcakes for a firm birthday event. We know what they went through to get on that directory, and we know they share our values in providing their goods and services. There is something satisfying in knowing that we’re doing good work within a community of good people. Let’s do what’s right for our world!
ABOUT THE AUTHOR
Chris’s life has meandered far from her degrees in sociology and elementary education from the University of Colorado but has now come full circle with the many years she put in as an administrator in the legal field. After being a stay-at-home mom for 10 years and many subsequent years volunteering and working within the Boulder Valley School District, Chris operated a successful freelance office services business for a variety of clients, including Milgrom & Daskam. Chris is happy to have now joined Milgrom & Daskam officially as the firm’s Legal Administrator.
FinCEN and Real Estate: Additional Disclosure Requirements May Be On the Horizon for Real Estate Transactions￼
As part of the anti-money laundering regime under the Bank Secrecy Act of 1970 (the “BSA”), in late 2021, the Financial Crimes Enforcement Network (“FinCEN”) division of the Department of the Treasury issued an advanced notice of proposed rulemaking (“ANPRM”) seeking to address potential money laundering through real estate transactions. The comment period for the ANPRM closed on February 21, 2022. This ANPRM comes closely after the notice of proposed rulemaking related to the implementation of the Corporate Transparency Act (the “CTA”), which you can read more about here. Both the CTA and the proposed regulations under the ANPRM would require significant levels of disclosure regarding the beneficial ownership of companies and real estate in non-financed real estate transactions. These measures aim to reduce money laundering, and assets held by undisclosed foreign investors. It is estimated that between 2015 and 2020, at least $2.3 billion was laundered through U.S. real estate, though the actual figure is likely much higher Accordingly, both FinCEN and Congress are trying to limit the number of real estate transactions used to launder money.
Two new laws are set to take effect in the coming months that will require employees to examine their current practices and make changes to bring themselves into compliance.
When I joined Milgrom & Daskam at the height of COVID, I wasn’t sure what the future would look like for me or this relatively young firm. We were giving up our physical office space in downtown Denver and embarking on a new vision for remote workers. Up until then, much of my professional work life was spent in an office environment, surrounded by colleagues My days were punctuate by in-person meetings–formal, over coffee or meals.in the hallways–and bookended by my daily commute between Denver and Los Angeles which ranged anywhere from just under 30 minutes to more than an hour.