Although they’ve recently been most popular with resources extractive organizations (which have distinct environmental and social impact in their sourcing locations), stakeholder engagement tools and software can make a tremendous difference to firms that operate across numerous other industries. With this article I’ll be presenting various small and medium sized enterprises that fall within these other industries, more specifically in North American context.
What’s the difference between entrepreneurship and social entrepreneurship?
Simply put, entrepreneurship is an organization’s willingness and capacity to develop and manage its activities along with any of the risks this brings, with the purpose of making a profit. But lately in North America and Europe, what we’ve seen are firms focusing on social entrepreneurship activities rather than simply pursuing their own entrepreneurial goals. As a social entrepreneur, an organization combines doing social good with making a profit. In this specific context, the firms fall under the legal category of for-profit organizations and must comply to all linked appropriate legal requirements. This includes engagement with their shareholders, but as social entrepreneurship organizations, these firms also must prioritize engagement with all their stakeholders.
In order to properly address and engage issues linked to their stakeholders, firms must go through the (sometimes daunting) task of identifying the stakeholders, prioritizing them and evaluating their engagement with them. When lacking suitable guidance and proven processes, the organizations might miss communicating, listening and engaging opportunities with important stakeholders with salient or topical issues. This is where legal frameworks for social entrepreneurs come in, like Benefit Corporations in the USA (some alternatives are found in California as FlexC companies or in some states as L3C Low-profit Limited Liability companies) or as a Community Contribution Company (CCC) in British Columbia, Canada.
These guidelines provides the guidance to appropriately engage with stakeholders and be accountable to them through legally established mechanisms. In most of the other jurisdictions in Canada and the US, benefit corporations don’t exist, but there is a certification standard that provides proof to society that a firm is in fact socially responsible, accountable and transparent in their engagement with stakeholders.
B Corp Certification
This is done through a B Corp Certification administered by the non-profit certification agency, B Lab. Important considerations regarding the firm’s impact on its stakeholders is evaluated using a B Impact Assessment tool and a periodic audit of the firm’s activities. Social entrepreneurial firms and other for-profit firms can thus leverage the use of B Corp certification to show their organizational, institutional and societal stakeholders their impact and be held accountable to strict standards.
The B Corp certification shows stakeholders a level of social engagement and demonstrates how a firm is in fact accountable and transparent in their own actions. The B Impact Assessment reviews a firm’s governance, its worker relationships, and community engagement and in this way provides a score between 80-200 that provides a benchmark for a company to work towards improvement. A stakeholder engagement tool can go a long way towards achieving high ratings on the B Impact Assessment by capturing the relationships and identifying key stakeholders and salient issues.
Therefore, the process of stakeholder identification and engagement and the use of B Corp certifications where firms are not legally established as benefit corporations allows the firm and its stakeholders to integrate in a socially beneficial way for the success of the firm within the context of its community.
To learn more about stakeholder management tools and how they can help you in either becoming a benefit corporation or getting you B Corp Certification, Contact us today!
More from this category
- Agnico Eagle Interview – Becoming More Efficient by Tracking Community Relations Activities
- What Is the Licence to Operate?
- Your Customer’s Stamp of Approval Is Worth More than You Think: Discover B Corps
- What Are Intangible Assets?
(and Why They Are Linked to CSR)
- What You Need to Know About the Accountability’s AA1000 Stakeholder Engagement Standard