Common good corporations may choose to operate at one or more of three stages of participation in this movement.
The three build on one another. In sum, they are:
Stage One Common Good Corporation: Such companies produce a code of ethics whereby the first item, which is not qualified by any subsequent items, is the following commitment: “Our highest priority is the common good of all of humanity and nature and our second priority is to be profitable to remain in business as a common good company.”
Stage Two Common Good Corporation: These common good companies further commit to permanently setting aside 10% or more of their profits each year. They invest these assets solely in common good investment funds, which in turn invest solely in common good corporations and companies converting to become common good corporations. The investor receives a return on these investments, assuming the companies or funds generate a profit.
Stage Three Common Good Corporation: At this level of commitment, common good companies further agree to placing a cap on the return to equity investors. Any extra profit is permanently set aside each year and solely invested as above. The cap can be adjusted from time to time based on market conditions and the company’s need for capital.
Any current company can easily choose to be a stage one common good corporation. It sets a moderate standard that could be expected to have many adherents. Citing fiduciary duty to shareholders, however, many companies do not think it is appropriate to choose this set of priorities. The first stage of commitment allows businesses of all sizes to publicly declare that they believe it is important to give priority to the common good in all they do. Then, together, we can find ever better ways to do it. Companies in the second stage clearly play an active part in financing the growth of the common good corporate sector.
Third stage participation is for those who want to not only finance the growth of the common good sector even more aggressively, but also make a statement that there should be a limit, perhaps generous, on the return to equity investors. This is the strongest statement that can be made that the company is giving priority to the common good.
It is our hope, and we believe the hope of people everywhere, that more and more businesses will freely choose to stand up and declare that they are committed to giving priority to the common good in all that they do. Then, just as has happened with the environmental movement, a consensus will build that this priority is urgent.
Just as trial and error have revealed optimal techniques and best practices for environmental stewardship, a concerted effort will teach us all how best to operate for the common good.
