
The family business practitioner is well versed in the importance of looking at alternative measures of family success beyond the financial performance of the family enterprise. Analysis of family business models can document and describe how a family will interact as a business-owning family and what values they will seek to perpetuate in order to successfully operate for the long term. However, it continues to be a challenge to develop compelling, transparent, and comprehensive frameworks that can be consistently applied, empower family members, and measure stakeholder progress. B-Corporations (B Corps) can provide family business practitioners with an extensive client framework that widens the business purpose to incorporate all stakeholders through assessment tools and a certification process that incorporates many principles for creating multi-generational enterprises.
Balancing Profit and Purpose
To balance profits and purpose, stakeholder theory provides a guide to governance constituencies, other than solely shareholders, that should be heavily weighted in deriving organizational purpose (Phillips, Freeman, & Wicks, 2003). Other stakeholders can include employees, customers, communities, and suppliers, along with the environment. In addition, other potential success measures include using transparency and legal structures to enhance social, community, and environmental impact, values often identified in family businesses. However, how does a business really measure performance in each of these areas and how can they compare their progress to other businesses?
The B Corp Role
B Corps represent a consistent cross-culture, globally used, governance framework for businesses to meet balanced standards of performance as they scale. The framework evaluates impact and provides valuable feedback in the areas of workers, community, environment, governance, and customers. Businesses who meet rigorous standards in these areas are certified and can advertise being B Corp certified. Consumers who utilize these businesses can be reassured that the social mission has equal importance to product and economic mission. This represents alternative thinking to the shareholder-centered incorporated entity (Kim, Karlesky, Myers, & Schifeling, 2016).
Assessment standards are consistently applied and although self-reported, they are periodically verified by the nonprofit organization, B Lab. B Lab is overseen by The Standards Advisory Council (SAC), which is made up of 20 independent business experts and scholars, who develop and refine the standards by which businesses are assessed. There is a different group within each that assesses developed and developing economies, as businesses in each have differing abilities to benefit all stakeholders.
Sidebar

by Brett Coffman
This week’s contributor, Brett Coffman, provides a two-part examination of Solution-Focused Brief Therapy (SFBT), an evidence-based coaching and therapy model, and its potential application to help family enterprise members find solutions to a variety of challenges.
- To reduce inequality
- To lower poverty
- To preserve the environment
- To create stronger communities
- To create high quality jobs
- To create linked prosperity in which all stakeholders connected to the business prosper (Honeyman, & Jana, 2019).
Steps in Becoming a B Corp
The B Impact Assessment Tool and Legal Framework can be accessed through B Lab. There is a free Quick Impact Online Assessment that can be utilized by family business practitioners that takes approximately two or three hours to complete. It is usually completed with the help of the CEO, CFO, COO, or an internal representative. It can then be converted to a more entailed Full Assessment. The following represents the steps in meeting the performance requirements in the certification process (B Lab, Frequently Asked Questions, 2020):












Over 50,000 companies have used the assessment, which means that most users do not formally become B Corps but still find value in the framework. This means that the frameworks can be used by a family business that may not choose to certify. While Certified B Corps and Benefit Corporations range from start-ups to publicly traded companies, most of them are privately-owned small and medium enterprises (Buerkle, Chang & Storto, 2018).

Conclusion
Family enterprises know the values they want to perpetuate but may not have a consistent framework to codify those values and ensure that they are built into the culture of their enterprises as they scale. Ongoing assessment work is a journey of continuous improvement and family enterprises would be well served to revisit the paradigm of their corporate values to create interconnectedness among global firms who want to do business, not because the enterprise is in their country or region, but because values and practices align. Nationalistic walls around family enterprises are diminishing because of political and public policy changes, resulting in greater global opportunity and community.
B Corp principles and tools represented through B Lab assessments represent a framework for multigenerational family enterprise stakeholders who seek to codify their family’s most unifying family values around a set of corporate principles, values, and criteria, to ensure a deeply meaningful and ongoing socially responsible family business. Family businesses have the opportunity to contrast their values and work through a similar framework to identify commonalities with other enterprises, be seen as unique, more worthy of partnering with, and creating products and services that are born out of those shared values.
References
B Lab, “Frequently Asked Questions,” https://bimpactassessment.net/how-it-works/frequently-asked-questions/top-10#what-is-considered-a”good”-score (accessed April 10, 2020).
Buerkle, A., Chang, K., & Storto, M. (2018). Just Good Business: An Investor’s Guide to B-Corps. Yale Center for Business and the Environment.
Honeyman, R. & Jana, T. (2019). The B Corp Handbook: How you can use business as a force for good. (2nd Ed.). Berrett-Koehler Publishers, Inc.
Kim, S., Karlesky, M. J., Myers, C. G., & Schifeling, T. (2016). Why companies are becoming B corporations. Harvard Business Review, 17, 1-5.
Friedman, M. (1970). The social responsibility of business is to enhance its profits. New York Times, 32(13), 122–126.
Phillips, R., Freeman, R., & Wicks, A. (2003). What stakeholder theory is not. Business Ethics Quarterly, 13(4), 479-502
