The Purple Tree was recently notified that their application to become a benefit corporation had been approved. In late 2017, Wisconsin passed Wisconsin Statutes Chapter 204 which created and recognized benefit corporations as a new category of business corporations. The law became effective on February 28, 2018, and The Purple Tree’s application to amend their S-Corporation status to a B-Corporation was waiting for the State to approve on that date. This makes The Purple Tree among the first benefit corporations in the state of Wisconsin as well as in Hudson.
The main difference between the two types of corporations is that a benefit corporation’s articles of incorporation must also state that it is, in fact, a benefit corporation. The benefit corporation’s identified purpose is to create general public benefit. They are also required to give equal weight to all stakeholders (shareholders, employees, community, and the environment) when making decisions. In other words, corporate social responsibility is woven into the company’s DNA. This corporate identification better fits the business model that The Purple Tree has followed since its founding a decade ago. The Purple Tree is a triple bottom line company, meaning that it prioritizes people, the planet, and profit in that order.
This change recognizes a significant cultural shift within the business community. For the past fifty years or so, the model has been one where the only legal requirement of a business was that it returned a profit to its shareholders and owners. The new B corporation model is a mission-driven model. Mission-driven companies, like The Purple Tree, are also attracting and retaining talent in greater numbers, and boosting productivity. According to a recent Harvard Business Review study, employees that derive a sense of purpose and inspiration from their work are three times more productive than their counterparts. In addition, the company’s profitability is also generally higher in such companies.
We are delighted that we are now able to operate under a legal corporate model that supports and requires the values that undergird and sustain our business.