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What Socially Responsible Businesses Might Learn from Jessica Alba

What does actress and entrepreneur Jessica Alba know that so many other business people don’t? That’s one question raised by the “Socially Responsible Business” section of the Stanford Social Innovation Review.

Alba’s health and beauty products will soon go public as, the Stanford post notes, a “registered benefit corporation, (which is) a new form of corporate statute that allows companies with a social mission to register separately from standard businesses.” The goal for “benefit corporations” is that a differentiated set of rules will enable them to better pursue their social goals.

The concept is to allow businesses to create incentives for consumers to drive responsible social change, rather than relying solely on governments, notes a post in Science Codex.

Benefit corporations benefit from important legal protections, reports the Hartford Courant. Connecticut is one state with a growing number of these businesses: “Traditionally, corporations are legally bound to put shareholder interests above all others. But a benefit corporation could, for example, accept a buyout from a company that shares their ideals, but didn’t offer the highest purchase price, without fear of legal retribution.”

The challenge is finding the hard numbers to measure success. The Stanford post notes that “there is a decided lack of empirical data on social enterprises in the United States.”

The piece continues: “Never mind the headaches of trying to define ‘impact,’ which too often degrades into simply counting an easy output, as when Tom’s Shoes announces how many pairs of shoes the company has given away without noting, for example, if the shoes went to people who did not previously have shoes, or if the people were actually wearing them. As it turns out, most of the registered benefit corporations are not publishing any impact data at all, never mind assessing it against a third-party standard.”

Perhaps that’s where Alba’s company could make its biggest impact.