picture of Rajah

Rajah Lehal

Some B Corps are using ESOP's to Unite Stakeholders' Interests

November 28, 2015

Links from this article: Read the article here.

This article argues that maximizing shareholder returns is not the best way to run a sustainable for-profit corporation. The author points to several “B Corporations”, or benefit corporations which do a much better job of engaging their workforce than traditional for-profit corporations. A ‘B Corp’ measures its success across 5 metrics: employees (pay more than the competitors), customers (charge less than the competitors); community (contribute more than the competitors); environment (reduce impact); and shareholders (pay a bit less..but still be very successful). The article describes several very successful B Corps. One of these businesses has recently implemented an ESOP, not as a strategy for retaining employees (their wages are already higher than the competitors), but as a strategy for uniting the interests of various groups including employees, shareholders and community.

Read the article here.Take away:

  • ESOPs can be used effectively in corporations focused on the welfare of the community.

Written by Rajah. Rajah Lehal is Founder and CEO of Clausehound.com. Rajah is a legal technologist and technology lawyer who is, together with the Clausehound team, capturing and sharing lawyer expertise, building deal negotiation libraries, teaching negotiation in classrooms, and automating negotiation with software.