A crucial component of being an SPC is that a social purpose report must be made accessible to the public at no charge on the corporate web site, four months after the close of the fiscal year. You are most likely already doing this in one form or another. Now your reports can focus on what you do best.
An SPC report contains a narrative about the declared environmental or social purpose, including the efforts intended to promote these purposes. It may also include the short- and long-term objectives, the actions taken to reach those objectives and those actions expected in the future.
To see some current SPC annual reports, go to the Social Purpose Stories page and see how SPCs put their social purpose to work.
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Measurements may be financial, operating or other performance evaluation means used by the corporation. Failure to provide a report does not affect the actions of the corporation but shareholders may demand and must receive the report. This mandatory disclosure of social purpose opens a dialogue with stakeholders.
By establishing the business purpose with social responsibility, SPCs are able to address some of the most pressing social and environmental issues through their reporting. Telling the story of your business, using your social reporting, promotes corporate citizenship and enhances your reputation for sustainable, profitable business practices. In the world of new and emerging media, a corporation can build shareholder and enterprise value through taking a multiple stakeholder approach to business.
Greenwashing and whitewashing therefore must be watched closely. Just as financial statements are critical to the transparent and honest functioning of a business—and directors are liable for such—social and environmental statements must also be carefully established following sound decisions and establishing clear value.
Consider all of the bottom lines when communicating with your stakeholders. Your stewardship should be related to your industry, rather than “add-on” causes. Social responsibility that relates to your business and aligns with the values of your stakeholders is the best way to strengthen your brand. Some areas of impact are your supply chain, your employee’s quality of life, the environmental and community. Creating this shared value goes beyond strategy—it allows a business to thrive in a market driven by stakeholder engagement and new media.
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As an SPC, the corporation’s directors must reasonably act within the best interest of the corporation and are required to consider the impacts on the declared social purposes of the corporation. In making decisions for the corporation, the directors may give weight to one or more of the social purposes and as an SPC are not liable for actions if these are taken into consideration.
Additionally, corporations are not “responsible to any party other than the corporation and its shareholders”, that is, they are not liable to third-party standard bearers for actions taken on behalf of their business. Since not all corporations will become SPCs, the law also helps to protect those who make financial decisions for social good, such as a software company donating money to a charity unrelated to their business model, by stating that this new corporate form does not alter the general standards for any director of a corporation that is not a social purpose corporation.
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The State of Washington’s website has a detailed list of the codified legislation. It is always a good idea to talk things over with your attorney to determine the best form of incorporation for your particular situation and your goals.