Post edited 2:16 pm – February 25, 2010 by wspademan

Here is a full explanation of the "common good corporation" as I am describing it in my book, articles, and talks. It is an exerpt from the chapter in my book entitled: Common Good Free Market Capitalism.   This exerpt does not provide all the context provided in the book and the portion of the chapter before this. In a few words, my argument is that the universe is one indivisible whole and, therefore, by nature we all give priority to the common good as we see it at all times whether or not we are aware of it. It is part of nature. However, at lower layers of maturity in mastering the skill of language and self-consciousness, we assume that the universe is an immense number of separate parts like the words in language. Only when we reach full maturity at the seven layer of maturity do we understand the nature of the oneness of nature and its relationship with language and self-consciousness. Then we freely choose to give priority to the experience of oneness each moment, see cooperation as fundamental in nature with competition being one of the lower layers of cooperation – cooperation, being fundamental, cannot be escaped, and give priority to the common good of us all in our activities because we discover it is the only priority in our activities that sustains the fundamental feeling of love as the context within which we experience everything else. I call the mastery of the seven layers of maturity the learning of the "love skill" and the choice as a result of giving priority to the common good "eldering."  

So here is the exerpt about the common good corporation within the assumption that we all by nature give priority to the common good and by creating the Common Good Business Community as an alternative to the Chamber of Commerce in every community we are providing a way for the vast majority of small businesses to get recognized for doing it which they do not receive recognition for now. It is also a non-violent social change process that simply provides a new option based on a more mature truth. Thus, without confronting the giving of priority to self-interest and profits, people will over time leave it and join us because we are based on a more mature truth.   Here is the exerpt:  

What Is the Common Good?

What is the common good? The first thing we know is that no one can tell anyone else what it is. This movement builds on the honoring of individual freedom. At the same time it is constantly maturing. Before 1950 consciously cooperating to sustain the Earth’s ability to support life was not a major part of the common good. Today it is.

We will be in an on-going discussion to discover together what it is for our time and to discover and learn best practices from each other. Common good corporations will join in associations to do this, and licensing agencies, such as B-Corp, will emerge to certify that businesses have met certain minimum common good standards.

There is much that is already assumed to be behaviors that give priority to the common good. Some of the obvious ones are to not kill, steal, or have slaves. Some of the recently emerging ones are a livable wage as the minimum wage, a responsible relationship with the environment, and fair trade. It now seems likely that a new one to emerge will be a cap on the return to equity investors (not necessarily an ungenerous one), with each year’s excess net profit being permanently set aside and solely invested in common good companies and funds that also place a cap on the return to equity investors and invest the excess in the same way. This will be one of the main ways the emerging common good business community will be financed.

Companies will constantly be learning how to better breathe the common good priority into all they do. Our modern world of instant information will be very helpful in the demand for transparency and accountability from directors and managers. In other words, openness and a genuine commitment to giving priority to the common good through a process of consensus building over time based on seeking to identify more mature truths together will replace government policing as the main way businesses on the planet operate. Customer loyalty will support this and they will increasingly abandon the companies that do not fully participate in this common good business community.

If from reading these words you can imagine it, it can happen, and it will happen sooner or later! The job for each of us is to help move us toward it by becoming one of the players making it happen. This is the joy of eldering.

Common Good Business Community

            Common Good Business Community chapters (CGBC) will emerge in towns and cities around the world. They may be a division of the local Chamber of Commerce or its equivalent or they may emerge as independent groups. They will associate together in a transnational organization.

Three Layers of Potential Commitment As Common Good Businesses

            There are three layers of potential, but not obligatory, commitment as a common good business. Whether privately owned, a partnership, an LLC, or a corporation, the layers build on one another. All current businesses can easily choose to be a layer one common good business. After all it is assumed by most that they already behave as such. However, since so many today are not, it is now necessary to have those who truly believe in the importance of giving priority to the common good in all of their behavior to stand up and be counted as part of this new movement. The second layer is for those who, in addition, want to take a significant and active part in financing the growth of the common good corporate sector by committing 10% of annual net profits as investment dollars to support it. The third stage is for those who want to more aggressively participate in financing the growth of the common good sector by establishing a limit on the return to equity investors appropriate for the risk undertaken but not more. They will do this by placing a cap on the return to equity investors that is in line with the financial risk undertaken. This is the strongest financial statement that can be made that demonstrates that the business is giving priority to the common good. Here are the three layers of membership in a CGBC:

1.      Membership. Choosing membership signifies a commitment to give priority to the common good at all times. This will not only make it easy for many businesses to join this movement, since so many local, small, and mid-size businesses, in particular, already behave in this way but it will also ensure them the recognition they deserve. They will produce a Code of Ethics in which the first item, which is not qualified by any subsequent item, states the following: “Our highest priority is the common good of all. Our second priority is profit in order to remain in business as a common good business. We fully do both, and we are learning to experience them as enhancing each other when in this order of priorities rather than in competition with each other.”

2.      10% Club. This is for those who, in addition, choose to permanently invest 10% of their annual net profit only in common good investment funds (CGIFs) that buy and convert companies to be layer three common good companies, members of the Cap Club. The business will receive a market rate of return on these investments.

3.      Cap Club. This is for businesses that also choose to place a cap on their annual return on equity and permanently and solely invest any excess in CGIFs that buy and convert companies into members of the Cap Club.

We are not concerned about the amount of the cap as long as it is made public. It is the principle that is important and making it public will result in a public discussion of what is appropriate. The principle is that equity investors deserve a financial return that is reasonable relative to their risk rather than an unlimited upside so the priority will always be the common good. Also the only exception to investing the assets in CGIFs would be to use them as collateral to borrow money to invest in the business during difficult times or to grow the business. It could also be used to buy back stock. If borrowed on, the interest cost and interest or dividend income can be similar, so the capital is able to serve both purposes at no significant cost to the company.

80% of Investment Capital Seeks a 10–12% Return

            Approximately 80% of investment capital is searching for a 10–12% return; only 20% is hot money looking for a quick and high return. The goal of The Cap Club businesses is to eventually place their cap near this (for instance, 13%) and to consistently provide it. In addition they will give comfort to investors by building up a large body of retained assets that are invested in CGIFs that back up their ability to do so. This will also attract strong consumer support. It will attract the 80% of capital available in the marketplace from endowments, pensions, and the public. Financial planners will want the conservative portion of their clients equity portfolios invested in these companies. Donations to the endowments of foundations can even provide the option of having the dollars restricted to only be invested in common good investment funds. It is through this kind of financial activity that the building of the common good business community will be seen as inevitably dominant on the planet. Companies will then rapidly convert to be common good corporations to remain in business, just as they are rapidly becoming environmentally responsible to remain in business.