It is still relatively rare for a private company board to think about social impact. Benefit corporations, a for-profit organization that explicitly seeks to pursue both private and public benefits, are becoming more popular. Their social entrepreneurs can learn about effective board governance from a proven source. It comes from those who manage 501c3s (a.k.a. nonprofits).
Under state law, benefit corporations must publicly report on their social impact each year. What metrics work for which kind of impact and systems and processes? How can these metrics be used to track impact over time? Nonprofits know all about this.
Nonprofit leaders know the work required to keep their board informed and engaged for the long-term. They invest in building healthy boards over many years. Nonprofits, unlike many private for-profits, know that a “real” board is one with more than a few of the CEO’s relatives on it. Real boards meet multiple times a year and have independent directors who bring insights from beyond the entrepreneur’s sightline. A benefit corp with a real board proves it is serious about benefiting society. Indeed, some state statutes require that there be a specific board director designated as responsible for oversight of the benefit and its publication.
So try reaching out to another part of the social-purpose world. For good benefit corporation governance, social entrepreneurs should try going into Guidestar to find nonprofits who work in the area you do and use the IRS’s NTEE codes to search. The sector is huge, with tremendous variety. For nonprofits who want to get connected to these benefit corporations or those who want to learn more about benefit corps, go to Benefit Corps.
Dorothy Adams is a benefit corporation and nonprofit strategy consultant dedicated to building robust social-purpose organizations.