P2P Foundation

“The fully realized for-benefit corporate design — with all the right elements, a design that’s capable of replacing the dominant model of today — may not exist yet. We may be entering a new era of design diversity, in which different designs serve different functions. Today, at least three broad approaches to for-benefit architecture offer promising models: stakeholder-owned companies, which put ownership in the hands of nonfinancial stakeholders; mission-controlled companies, which separate ownership and profits from control and organizational direction; and public–private hybrids, where profit-driven and mission-driven design elements are combined to create unique structures.”

Article: Not Just For Profit: Emerging alternatives to the shareholder-centric model could help companies avoid ethical mishaps and contribute more to the world at large. By Marjorie Kelly

In the above essay, Marjorie Kelly explores three new-style corporate designs: 1. stakeholder-owned companies; 2. mission-controlled companies; and 3. public-private hybrids.

See here for details about the typology.

Abstract

“We introduce the concept of For-Benefit design, a new organizational archetype that is a hybrid that combines the traditional for-profit archetype, which has profit at its nucleus, and the non-profit archetype, which has social mission at its nucleus. For-Benefit designs have a blended purpose at their core: serving a living mission and making a profit in the process. These emerging designs represent an alternative to the shareholder-centric model that could help companies avoid ethical mishaps and elevate their contribution to meeting societal needs and expectations. The paper discusses various examples of such companies within a three-part typology: Stakeholder-Owned Companies, Mission-Controlled Companies, and Public-Private Hybrids.”

Excerpt:

“Richard Nelson, an economics professor at Columbia University who cofounded the field of evolutionary economics, observes that social systems evolve because of two kinds of innovation: advances in physical technologies (such as new environmental and energy technologies), and advances in social technologies (such as new forms of organization). As these two types of innovation influence each other, the governance models that emerge, such as microfinance-related structures, take their place alongside older, more established alternative models, such as cooperatives, employee-owned firms, and government-sponsored enterprises. These designs can be thought of as emergent new organizational species, occupying a new sector of society that is a greenhouse of design experimentation in which the future of our economy may be growing.

One helpful way of thinking about these designs is as representing a hybrid between the traditional for-profit archetype, which has profit at its nucleus, and the traditional nonprofit archetype, which has social mission at its nucleus. This type of hybrid has been dubbed the “for-benefit enterprise” by Heerad Sabeti, CEO of the TransForms Corporation — a North Carolina–based manufacturer of wall decorations with about $2 million in revenues, which routinely employs people with disabilities and invests heavily in developing its workforce. Sabeti is one of several people who have begun to explore the parameters of this new archetype. (Another source of exploration is the Corporation 20/20 initiative, organized by Allen White and me at the Tellus Institute in Boston.) All of these initiatives conceive the new type of organization with a blended purpose at its core: serving a living mission and making a profit in the process. The essential framework of such a company — its ownership, governance, capitalization, and compensation structures — are designed to support this dual mission. And it is this design that enables companies to escape the pressure to maximize short-term profits and instead to fulfill a more fundamental purpose of economic activity: to meet human needs and be of benefit to life.”