I read an article recently describing some leading-edge ideas in finance, and it discussed a new type of corporation called a “Benefit Corporation”. Intrigued, I went to the Benefit Corporation website to learn more. On the landing page of the website was a description of what a Benefit Corporation is:
“Benefit Corporations are a new class of corporation that 1) creates a material positive impact on society and the environment; 2) expands fiduciary duty to require consideration of non-financial interests when making decisions; and 3) reports on its overall social and environmental performance using recognized third party standards.”
It sounds very familiar. In another era, Fraternal Benefit Societies were a new creation designed to accomplish similar goals.
Fraternal Benefit Societies, like UCT, create a material positive impact on society. Members of UCT, for example, have donated millions of dollars and hundreds of thousands of volunteer hours to various charitable causes in their local communities. Our common bond is an interest in good citizenship. We want to improve our local communities.
Fraternal Benefit Societies consider non-financial interests when making decisions. We have to manage our financial services business to ensure that we can meet our commitments, but we also must ensure that we meet the non-financial needs of our members and their communities.
UCT, like other members of the American Fraternal Alliance, reports on our community service work to the Alliance. That information is compiled every year, and the benefits to society are enormous.
Benefit Corporations are an interesting idea, seemingly born out of a concern about companies not focusing enough on the needs of all stakeholders. Corporations with an explicit focus on giving back to society would certainly add value.
Fraternals have been doing exactly that for over 100 years. Take a look at UCT and see how what’s old is new again.