This episode will introduce you to Benefit Corporations. This is a new type of corporate structure. Instead of just focusing on profits, a Benefit Corporation by law focuses on people, profits and planet. This type of business is also known as a triple bottom line company.
Our guest Ted Castle is the President and CEO of Rhino Foods based in South Burlington, VT. Ted is one of the best practitioners of open book management I know. This makes his company a natural to become a Benefit Corporation.
You can find more information out about Rhino Foods here.
In today’s podcast you’ll learn:
- What a benefit corporation is.
- Why you might want to think about having your company become a benefit corporation.
- What it takes to become a benefit corporation.
- How you go through the benefit corporation assessment
- Who BLabs is and how they’re an integral part of benefit corporations.
Narrator: Welcome to the Sustainable Business Radio Show on podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. The Sustainable Business is all about creating great outcomes.
Here’s your host, certified financial planner, student, entrepreneur and private business expert, Josh Patrick.
Josh: Today’s podcast features Ted Castle, the president and CEO of Rhino Foods. Ted and his company are one of the leaders in the Vermont business scene. I think he’s a true visionary on working with employee involvement and has created a company that’s successful for all stakeholders. Today, Ted is going speak with us about benefit corporations and why you might want to become a benefit corporation. Let’s get right to it and find out what a B-Corp is and how becoming one just might benefit you, your business, your employees and your community.
Our next guest is one of my favorite people in the world, Ted Castle, who’s the CEO and founder of Rhino Foods. Rhino is a premier supplier – probably “the premier supplier” of cookie dough as well as other mix-in products that are primarily used in the ice cream industry. The reason I’m going to speak with Ted today is because he’s among the most innovative and interesting business owners in Vermont. I think, he’s the best practitioner of open-book management of anybody I know in the country. But today, we’re going talk with Ted about what’s called benefit corporations and what becoming a benefit-certified company can do for your business.
Hey Ted, how’s it going today?
Ted: What an intro, I’m going to make sure my wife listens to this program, Josh.
Josh: But she won’t believe it.
Ted: How are you? I’m doing well.
Josh: Cool. I’m fascinated benefit corporations. I think it’s a new form of corporate structure and one I think that has like a gazillion different uses. Can you start off by telling what is a benefit corporation? What’s different between a regular corporation and a B-Corp?
Ted: Well, first of all, there is a legal definition. In 27 States, there is such a thing as a B-Corporation and 14 more States are working on it. For people that don’t know much about it, first of all, there’s this amazing website, just Google B-Corp and you’ll run into their website. It really is a great site that will help you.
But in my words, Rhino was an S Corporation, and what we had to do was we had to change our articles of incorporation which was actually very simple. Basically, what you’re saying in essence is that the corporation is founded on the belief of trying to increase value for the shareholders or stakeholders like most companies. But also, the leadership of the company is making decisions in the best interest also of the environment and the community. It’s trying to bring in those two aspects instead of just shareholder value.
The other thing that I think is a nice way to look at that is it’s for people who run a business, or own a business, or want to be part of a business that’s using business as a force for good is really part of the mantra. It is about that business is a game changer but it’s also trying to figure out as a force for good with the assumption that the environment and the community is part of what you need to be thinking about as you make your decisions in your everyday work.
I’d also add that there’s another component is that the B Lab which is an assessment vehicle used by B-Corporations. There is a great assessment vehicle and you need to score over 80 points on their assessment to be able to be a certified B-Corp. It is sort of a club of people that are doing business a certain way. We can talk more about the assessment as a tool but basically you can’t become a B-Corp unless you pass that certification – meaning, that you’re part of a unique group of people that are not only trying to do the right things but actually are exhibiting/doing the right things. It’s a matter of taking that assessment and being evaluated on your performance.
Josh: Cool. Why did you actually decide to become a B-Corp?
Ted: We became a B-Corp about a year and a half ago. We had looked at it about it five years previously. We’re always looking at a way to assess ourselves. We’re in the food business so we get audited by lots of different regulatory agencies and our customers. We do a lot of B2B business but always we’re looking for more of another way to evaluate ourselves in a different way than maybe performance excellence or Baldrige or something like that.
And B-Corp, we felt, in the last five years really improved their assessment tool. The biggest thing we wanted to do was use that tool as a vehicle to decide what we are good at and what we need to improve on. The reason we joined was two‑fold. We felt like the assessment was important. You can actually go online. It’s a free service. You can just use the assessment. But Rhino actually wanted to be part of a movement. Our purpose is actually to impact the manner in which business is done. Knowing we wanted to be an early adopter on this B-Corp movement, we really believe in sharing best practices and learning from other B‑Corps but also influencing the way business is done.
Josh: Do you think that you’ve been successful with that?
Ted: Yeah. In a short time, we’ve attended both retreats. The founders of the B-Corp and the people that work there are outstanding individuals. They are very authentic in believing in their cause. They see this really as a mission and a movement. Right now, there’s almost 1300 corporations already in 38 countries, in 121 industries. The way they talk about it, we’re all together with a unified purpose is to really see that business can be a force for good.
Rhino definitely wants to be part of that group. We’re going to do what we can to grow this movement. But also, improve the way we do business. We think that we do a lot of good things here but there’s a lot more work to be done.
Josh: When you were going through the certification process, what did you learn about your company that you were either surprised, both negatively and positively, by?
Ted: Well, when we took it, we felt like we were very strong in our workplace practices and that sort of proved itself out. We knew that we had slipped a little bit on our environmental performance, mostly on the fact that we had done a fair amount of work on that about ten years ago and done some things but we really hadn’t come up with anything new. We hadn’t been trending in a positive way. We weren’t really measuring things as much as we could. For us, it was more about finding pockets and areas of improvement and probably validating what we knew. But I would say that’s where, for Rhino, it validated our belief that we hadn’t quite made our environmental efforts as sustainable as we wanted to. It was one of those things that I think we put some time into it and went on vacation for a while.
Josh: Have you gone off vacation on environmental issues?
Ted: Yeah. We have someone, my son Rooney is actually—we call him our B-Corp champion. His job is to really know what’s going on in the B-Corp community, understand the assessment better than anybody here. And then he has a team made up of someone from HR – actually someone that’s working on environmental programs, and also on our internal and external communications and being able to be sort of a proud member of that community. I think, the fact of doing this got us back into that idea of having someone focused on the environment and we would call that environmental coordinator. It’s not a full time position but it’s probably 20% of this person’s time. That person’s job is to not only influence how we do things at Rhino but also influence our employees to do better things for the environment in their everyday lives. So yeah, it definitely has brought some light onto some situations that we could do better.
Josh: So Rooney is your B-Corp champion, would you recommend that anybody going through the B-Corp certification have a champion that is responsible for all things B-Corp in their company?
Ted: I just know at Rhino, we’re a small company, we have about 100 employees. If we don’t put a person in charge, or put a task force, or a committee, or a project team together, things end up sort of falling between the cracks or you can get all excited about it for about six months and then people get busy with other things. We’re looking at this B-Corp effort as a long-term investment and a long-term project for Rhino. So, when we think about something that we want to be sustainable, we tend to make it someone’s responsibility or a committee’s responsibility. For us, the answer would be yes, 100%.
Josh: That certainly makes sense to me. You have a major customer who is very concerned about their suppliers being values-led and it seems to me that being a B‑Corp just might help out with that, could you talk a little bit about that?
Ted: Well, Rhino invented cookie dough ice cream with Ben and Jerry’s 25 years ago. Fortunate for Rhino that we were in the right place and had a great partner with Ben and Jerry’s. We now have over 50% market share of all the cookie dough and ice cream applications in the country. That’s been a great learning experience for us as we’ve grown our company and watched all the great things at Ben and Jerry’s. It has been leader in social responsibility.
Really, what the B-Corp was able to do is Rhino is a company that doesn’t focus on sort of one effort and say that we do this one thing for our employees, or we do this one thing for the community, or this one thing for the environment. I think that what I’m proud of is that we’ve actually done some innovative and impactful programs in all those areas. And so, what this helped Ben and Jerry’s do that, it is now owned by Unilever, is have a way to really measure their suppliers in a meaningful way. Instead of just saying, “Oh, we want to have suppliers that care about the environment or are values-led.” It’s, “prove me.” So, taking that assessment is a very useful tool for them to be able to say “Yes, Rhino is in that unique category that they have achieved a score over 80 points which puts them in a category that they’re obviously are doing some good things and matching the Ben and Jerry’s triple bottom line which is trying to look at more than just making money.”
Josh: Just to remind our listeners, triple bottom line is?
Ted: Well, I’ll do my best, but it has to do with making money but also thinking about the environment and thinking about the community. Ben and Jerry’s is all about the planet and the environment. It’s all about community and social responsibility. It also believes that you need to be financially strong.
Josh: Changing gears just a little bit. It seems to me that B-Corps might be, especially with the millenials, a pretty good recruiting tool. Have you found that’s true or false? Could you talk a little bit about that?
Ted: Rhino specifically hasn’t experienced that but if I was talking to college kids or I’ve used this example quite a bit over the years and said to people, “You really should check out the values of a company. If you care about the environment, or you care about workplace practices, or you care about your company’s involvement in the community, you should be asking the people that you’re getting interviewed to explain what they do.” The last year and a half, I’ve told them, “You should talk about a B-Corp and go look at the B-Corp site and see who are the companies that are out there doing this?” I do think it is a great tool for young people to get on that website and Google who in their area is a B-Corp. And if those values are important to them then that would seem to me to be the first place to go looking for a job.
Josh: Do you think you’ll be using your B-Corp status as a recruiting tool in the future?
Ted: We definitely do. I mean, we talk about it with anybody that comes in for a job. We actually show it to our customers that we are. We show it to our suppliers. We’re starting to encourage our suppliers to think about this.
So, when you think about a movement, it’s all about keeping a conversation alive and also being authentic to—“if you say these things are important then show me you’re doing them.” That’s what I like about the B-Corp community. It’s not just a sort of symbol of you get to change your articles of incorporation, say these are important to you but if you can’t prove it or you can’t score above that 80 points, you can’t call yourself a B-Corp.
I believe it is one of the things that makes it unique. It is a certification and that’s a very important aspect of the B-Corp community. It’s not just, “Hey, I want to join this club.” It’s “Hey, I want to join this club and I also need to prove that I’m doing it on a consistent day-to-day basis.” Actually, most of the B-Corps are not just saying I’m doing it, I want to get better at it. It’s an open community of people sharing best practices.
Josh: Very cool. Changing gears, once again. To think about succession planning because you’re about my age—
Ted: Am I as old as you?
Josh: I don’t know. We’re about the same age, I think. We’ll talk about that later.
Josh: So, when you think about succession planning, does a B-Corp fit in with your thought process at all?
Ted: Oh definitely, we’re a privately held business. I own the business with my wife. I’m 63 in two days, Josh, so you can try to figure that out.
Josh: You’re older than me, by the way.
Ted: The legacy of Rhino is really important to me. We consider our purpose of impacting the manner in which business is done and our principles very important here. Part of being a privately held business and being an owner is trying to see where doing what I want do and we want to do together. What’s nice about Rhino is most of the things that were doing really well in the areas of finances, employees, customers, suppliers and community – they’re not my ideas anymore. It’s not Ted-driven. It’s really a company of people that believe in what we do. It’s 100 people trying to figure out a better way to do things. It’s not just me. That’s probably on of the things I’m most proud of. If can do anything to have that keep going after I’m not around then I’m 100% into it. I do think that B‑Corp is a great way to continue to build on that foundation and the sustainability of those ideas, for sure.
Josh: It sounds to me like the next owner of Rhino, whoever that may be, has to buy into—not even buy in but actually actively practice the principles of being a B‑Corp or you’re not going to let them own it?
Ted: Oh, 100%. I don’t know if I’ve ever looked at it that way – exactly that way but I think that what you said is very true. It’s a good way to put some specificity to the situation, for sure.
Josh: It sort of starts putting a bracket around what your requirements are for people who’ll be the next owner?
Ted: Yeah. I mean, some of these things that people think are all touchy, feely things with your employees. Everybody wants to be good to the environment. But this is a data-driven, outcome-driven assessment that people that are involved at the B-Corp and B-Lab are very serious individuals and staff. They’re after influencing more and more people. This is not a group that is going to be satisfied if there’s only 5,000 B-Corps in the world. They are looking to have millions of B-Corps in every country, in all kinds of industries. Their growth curve is very strong but they are not content with just nibbling away at the edges here. They’re really interested in trying to change the way business is done and looking for the right companies to do that and be the leaders. That’s why we’re excited to be part of this group.
Josh: Cool. Ted, how would somebody find you if they were interested in having a conversation about this stuff?
Ted: Well, Rhino Foods. It’s R-H-I-N-O-F-O-O-D-S and get on our website. Our website is really designed to talk about not only our products but our company and sort of share our best practices. You’ll see a section around B-Corp there. They can look there. The B-Corp website is amazing. It’s all about sharing and engaging people. We have a pretty nice video that actually talks about Rhino and being a B-Corp. We’d love to have people visit our website and they can always track me down.
Josh: Okay. Ted, thanks so much for your time today. I really appreciate it.
Ted: Okay. Thanks, Josh.
Josh: You’ve been listening to the Sustainable Business Podcast where we talk about what you need to do with your business if it was to be here 100 years from now. If you like what you heard and want more information, please contact me at 802‑846‑1264 ext 2 or visit us on our website at www.stage2solution.com or you can send me an e-mail at email@example.com.
This is Josh Patrick and thanks for listening. I hope to see you soon for another edition of The Sustainable Business.