Companies like any other, yet in many ways more ”forward” than others, geared towards generating a positive impact on the community. They are called C-Corps, but should not be confused with American-style C-Corps (a special tax regime in which corporations are taxed separately from their owners). And they hardly compare with Olivetti’s enterprise-community movement. “It is conceptually flawed to evoke Olivetti in 2021, because that was a completely different era, without things like the Workers’ Statute or exploitation”. These are the words of Paolo Gubitta, professor of Business Organisation and Entrepreneurship at the University of Padua, scientific director of the CEFab of CUOA Business School, member of the Ethics Committee of Padua European Volunteer Capital and, more recently, member of the technical-strategic committee for the Veneto economy, set up by Veneto Sviluppo on behalf of the regional government to promote post-COVID recovery. He coined the term C-Corp, which he defines as a real corporate ‘posture’. The metaphor that best captures this concept is someone who knows how to adapt to different contexts and is always measured and appropriate, never out of place or out of tune, who knows how to make all those with whom he or she interacts feel good.
Professor, it’s only been a few years since we began seeing B-Corps (companies that go beyond the profit motive and aim to maximise their positive impact on employees, local communities where they operate, the environment and all stakeholders) and now we’re already seeing C-Corps: doesn’t that seem a bit much?
Guido Zovico, who came up with the C-Corp concept, and I asked ourselves the very same question. Do we really need another concept? Wouldn’t that just lead to confusion? If we are here talking about it now, it means that the answer we gave ourselves was “No, it doesn’t seem too much”. Here’s why:
“The C-Corp consciously interprets its role as an integral part of the local communities where it operates and intentionally endeavours to activate collaborative relationships with people, social components and local institutions, aimed at generating beneficial effects for local communities which recognise the community value and support its growth”.
Where is the point of departure in comparison with B-Corp?
Let’s start with the form: C-Corp is a posture while B-Corp is a certification. C-Corp is a way of being and behaving that merges and integrates values and culture, tacit knowledge and social conventions into an inseparable whole. You can only become a C-Corp by consciously activating a process that involves several internal and external stakeholders, working with them jointly to define the intended impact on the local area and community. A C-Corp manifests itself through individual and collective actions (entrepreneurial, managerial, workforce), corporate strategies, participation in social development.
A B-Corp is a certification (though there may be others) stating that the enterprise fulfils a certain set of requirements or meets minimum standards, referring to four areas: governance, workers, community and the environment. a voluntary expression of intent, which only materialises with the intervention of an external party and on condition that this party certifies that it meets the requirements (or standards). Certification is reversible (i.e. it can be lost) either by a voluntary decision of the company or because a third party finds that the conditions are no longer met.
This reasoning can be further clarified by recalling that there is also the Benefit Corporation, which is a legal form that companies can voluntarily adopt by amending their articles of association and declaring that “in addition to the aim of sharing profits, they pursue one or more common-benefit purposes and operate in a responsible, sustainable and transparent manner towards people, communities, territories and the environment, cultural and social assets and activities, bodies and associations and other stakeholders”. This is a corporate structure defined by Law No. 208 of 28 December 2015, which came into force on 1 January 2016, and which binds the company to take charge of certain aspects outside its core business. Even in this case, the choice is reversible by decision of the owners, so long as the object of the company is changed and, therefore, the consent of a qualified majority of the shareholders is secured.
Where does the name C-Corp come from?
The letter “C” in C-Corp stands for Community and translates into “Community-Corporation“, to identify the realities that act as inseparable, generative and responsible parts of the Community and that contribute (consciously and intentionally) to its well-being and sustainable development, gaining recognition and legitimacy from the Communities, which support their growth. The C-Corp is embedded into the local communities and, therefore, a multisite company may express different postures in relation to specific needs or projects that it defines together with local stakeholders.
B-Corps concentrate on meeting the parameters in the four areas mentioned above. While the minimum threshold of parameters changes over time, a B-Corp’s orientation is primarily inward-looking: redesigning processes and practices to reduce or increase impact (environmental and social), wherever the company operates. Admittedly, B-Corps make commitments to society and the local area, though they are not decisive in securing or maintaining certification.
Does this mean that there’s some overlap between C-Corps and B-Corps?
In some respects this is indeed the case. Take the case of Zordan in Valdagno. This company is both a B-Corp and a Benefit Corporation.
During the difficult spring of 2020, in the midst of the COVID-19 pandemic, it proved itself through and through: distributing fabric masks that could be reused after washing “which we decided to issue two per person because they could be useful when on the go or given to family members”; drawing up a policy to cover possible contagions among its workers; and arranging for free training so that “our downtime could be put to good use”.
In an effort to generate social well-being internally, at the end of March 2020, just after entering total lockdown due to the Coronavirus emergency, Zordan opened its corporate blog and ‘moved the corporate community online’ with the aim of supporting workers and their families in dealing with an exceptional situation that nobody had ever experienced before: forced isolation and disruption of social relations. With a view to maintaining cohesion on both sides of the Atlantic, they devised Friday appointments, discussions on books, cooking and gardening, company-funded online training proposals, web tips for quarantined employees and, since August, they even recognise an overseas Employee of the Month. Since opening in November 2020, the blog has grown to 103 posts and the company has even assigned someone to manage it.
However, it also accomplishes something else: on 4 and 15 September 2020, two posts appeared on the company blog dedicated to Banchetto PIANO, the choral initiative of Zordan, the Municipality of Valdagno and others in the area to help schools restart safely: a bench that can be transformed into a seat or a cabinet and that at the end of its life can be completely recycled. The company contributed 250 hours to design, prototyping, manufacturing and painting, not to mention 120 hours donated by twelve employees from the company community. The Zordan family has also made the project model freely available so that it can be used (and improved) in every community involved in the initiative.
There is still one remaining topic to wrap up: what will happen with CSR?
The C-Corp is CSR that is now coming of age. Corporate Social Responsibility (CSR), using the definition of the European Commission’s Green Paper published in 2001, is “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”. In fact, it is the set of activities not strictly required by business that companies, motu proprio, decide to undertake for social purposes (to be increased) or environmental impact (to be limited or reduced). is a unilateral decision, needing no negotiations with external parties, generating no obligations (other than moral ones) and reversible at any time. C-Corp embraces these concepts, yet also brings them forward together with external stakeholders.