Stakeholder Governance and Corporate Purpose in Certified B Corps: Minimizing Conflict and Fostering Collaboration

Although a stakeholder-inclusive approach to corporate governance is becoming accepted more widely, we have little idea on how it can be achieved in practice or understood theoretically. B Lab Australia and Aotearoa New Zealand requires certified B Corporations (B Corps) to include in their corporate constitution formal commitments to pursuing a pro-social purpose and taking their stakeholders’ interests into account. Through interviews with 20 B Corp leaders, we explore how this model of stakeholder governance is implemented. We find that an organization-specific corporate purpose helps leaders to attract, select, and retain supportive stakeholders and minimize stakeholder conflicts. We identify three decision-making processes (Establishing, Applying, Developing) and three signaling processes (Announcing, Demonstrating, Sharing) through which stakeholder governance is achieved. Our findings extend emerging theories of stakeholder governance by moving away from a focus on conflict resolution to demonstrate its potential to foster collaborative systemic change. B Corps display a helpful model for purpose-led stakeholder governance with the potential to be applied more widely.