Launch of new governance model for B Lab Australia and Aotearoa New Zealand

As the B Corp movement continues to grow, we sat down with Andrew Davies, CEO of B Lab Australia and Aotearoa New Zealand, to hear about the impact the region’s new governance model will have on the movement. 

When it started, B Lab Australia and Aotearoa New Zealand (AANZ) had the goal to build local momentum around what was then still a fledgling B Corp movement in the US. 

Since that launch in 2013, B Lab AANZ has gone on to oversee, certify and advise a movement that’s now generating more than $7 billion in revenue per annum in our region. 

As the movement has grown and developed in Australia and New Zealand, as well as overseas, so too has B Lab. The AANZ team has doubled over the pandemic, and as businesses head into 2022 with a new sense of purpose, the time seemed right to overhaul the region’s approach to governance. 

We sat down with Andrew Davies, B Lab AANZ’s CEO, to talk about what the new model means for the movement and what impact he hopes it will have. 

Can we start with you defining what ‘governance’ means within the context of this conversation? I feel like it can be a word that means different things to different people.

Governance is so often interpreted, and quite rightly, in terms of what are the obligations of a board. So let’s call that “business governance” and it’s very important to have. But, for us, governance also extends to thinking about the kind of rules and processes needed to make decisions within a wider community.

Our very small board had become very focused on business governance and we had an aspiration to expand its remit, rethink and expand the board while building out a slightly wider community lens.

We started to think about how we could create spaces to really make sure that our board and the B Lab executive were acting in the interests of the wider B Corp community. We asked ourselves, “how do you lead when you don’t have sufficient engagement with those that you’re leading?” and “what’s the right model for creating those spaces?”

And the new governance model B Lab is launching is helping to answer those questions?

The three-tiered structure of the new governance model helps us answer them. The new structure has the B Lab board as well as a newly formed B Council and then the Horizon Council — each are meeting different community needs and together create the new governance system. 

What made you decide it was time to change the model? 

Having unstructured inputs from both B Corps and the board can lead to overwhelm, for a small organisation. You’ve effectively got a representative client group sitting on the board saying: “Well, we think you should do this or cut your costs or change prices etc” whilst also navigating fiduciary duties of directors. All perfectly reasonable conversations, but they are coming from a very specific point of view.

So we wanted to separate the movement building and the movement direction from those aspects of decision making, which is really around where the B Council comes in. We wanted a way to get the perspectives of B Corps and have them have a voice in how the movement should evolve without bringing the other usual aspects of board governance into the picture e.g signing off on annual budgets and business plans. 

Why now?

The biggest reason behind changing things now is really the maturity of the B Corp community and its diversity. We need to respect the fact that we’re engaging with 350 (and climbing) very different businesses. We’ve got this incredibly diverse pool of businesses and yes, of course, there’s common ground around the B Corp certification, but the potential scope is much broader in terms of what we might engage on both with each other as a community of B Corps, and externally. 

So, how will this new model work? 

When we were rethinking the governance structure we recognised that we needed to rethink how we connect as well as how we keep focused on our mission to actually change the economic system. We knew that it meant tapping into the wider community to create change, which is why we’ve introduced the B Council and the Horizon Council. 

At the moment, the Horizon Council is envisaged as being more of an event than an elected body. 

We foresee it as being an open event where we invite lots of different people to encourage conversation. So, it might be academics or adjacent organisations like Fairtrade or the UNGC as well as individuals who might have once been early adopters of B Corp but have moved on. The Horizon Council event is really about taking a wider lens to connect with, and learn from, others on the same mission. We’re hopeful that the first one will run in 2022. 

And how is the B Council different? 

Our vision is that the B Council will need to invent itself. We’re not going to tell the B Council how exactly it should operate. What we’re doing is helping to appoint an inaugural B Council and then charging them with figuring out how it runs. Should future members be appointed to represent a region or sector, or should it be a democratic model with elected representatives? There’s any number of ways they might organise themselves, but we decided it was better for the B Corps to figure that out than for us to decide on those mechanisms. There is an EOI campaign running for this first B Council and then the specific brief to the first council, which includes the B Lab board, is to effectively develop what becomes the second B Council. 

And so what will the B Council do? 

At the moment, we see them playing a role in influencing the strategy and direction of the movement. It will enable B Corps to have vital input in a forum designed specifically for that purpose, with the “business governance” obligations that directors hold.

What do you, as CEO, want to achieve from this new governance structure?

I think it’s twofold. The first is to better connect with and represent the B Corp community. It’s quite unusual for a certification like B Corp that the businesses have such a strong element of working and connecting with each other. And that’s one of the special things about B Corps, they don’t just get certified and do their own thing — they tend to collaborate.  And so it’s about making sure we maximise the potential of the B Corp community. 

That leads to the second success driver of this new structure, which is that we really want to drive the change that we’re seeking and there’s an acceleration that comes from really connecting with others who are looking to achieve the same change. Success looks like creating a bigger movement beyond just the certified B Corp community.  We are looking to actually change the culture and practice of business, and to do that we need to go wider.

Register your interest in being part of the inaugural B Council here