Thursday, June 17, 2010

More on Cape Wind - Rate Regulators Reviewing Power Purchase Agreement

For Cape Wind, the proposed first-in-the-nation offshore wind farm, moving on to another stage of the process of approval is how it goes. A standard review of the project's power purchase agreement with National Grid is underway with a public hearing before the state's public utility review agency. What is in the landmark contract? There will be a great in-depth treatment of the details of this technology and business deal at a June 30th PBLN forum at Akamai Technologies in Cambridge, Massachusetts - business leaders who are interested can sign up here and the forum will feature nation-wide participation via a web-ex hook up that you can sign up for right here.

A compelling analysis of the basis and terms of their agreement with Cape Wind was sponsored by National grid and authored by National Grid exec Richard Rapp and renowned energy economics expert Susan Tierney, PhD here. It is the case for why the deal should be allowed to go forward and they filed it with the oversight authorities for this week's hearings.

In response to the hearings, the Boston Globe featured a vigorous statement of support for the deal by PBLN member CEO George Matouk. His Fall River manufacturing plant uses 300,000 kilowatt hours a year of National Grid power, and in George's view,  paying slightly higher prices for wind energy is a bargain if it means stepping up to the challenge of changing our total energy supply. In his words, “I think that the potential benefits from having more wind energy in Massachusetts, from an economic point of view, would offset [moderately higher prices in the short-term.]’’

The same article features the news that Wal Mart has come out publicly against the power purchase agreement, saying the price being too high for the number one company in the Fortune 500. Strange that such a widely recognized corporate champion for greening their business would take such an awkward stand. It is not the first time in recent memory that Wal Mart has popped up in a Massachusetts renewable energy conversation. They were rebuffed by Massachusetts Secretary of Energy and Environmental Affairs Ian Bowles in February 2010 for failing to include any provision for renewable energy in their plans to open a new store in Salem, Massachusetts. The state has stringent requirements for new commercial construction that are part of a whole policy package intended to reduce greenhouse gas emissions.

The Associated Industries of Massachusetts has ripped the Cape Wind-National Grid deal showing no interest in a long-term vision of the transition to clean energy that Cape Wind represents. They also ignore the fact that there are many companies, probably including many in their own membership who are more than happy to pay slightly higher prices in the short term in order to see the region investing in first-mover advantages in what could become a defining 21st century feature of our state's economic growth. 

Look for the businesses supporting Cape Wind to try to get their views out over the din of chatter about Wal Mart. Some of them include Legal Sea Foods, Saunders Hotel Group, Millipore, Aggregate Industries, Genzyme, Grossman Marketing Group, and many more listed among the Environmental League's Corporate Council

We won't be able to blog about Cape Wind every week forever but it does seem like a rich microcosm of the shift taking place in conventional wisdom about what is "good for business" in the 21st century economy. And it almost goes without saying that if Congress would move Senator John Kerry's American Power Act into law we can begin to see public policy and private sector innovation shape markets for renewable energy growth.Then the price of wind energy will really look good. Even without Congressional action, agency action together with a coming increase in oil and gas prices that is sure to accompany the global economic recovery will make lots of business leaders clamor for cheaper, more stable renewable energy alternatives.

Cape Wind and National Grid: How the New England Renewable Energy Deal of the Century Is Getting Done

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Wednesday, June 9, 2010

Calling all Business Leaders: Make it Your Business to Call Washington to Protect your State's Budget from Drastic Cuts

In Massachusetts and 29 other states, the fiscal year ends on June 30th. A year of harsh budget cuts is coming to an end and an equally challenging if more hopeful one is about to begin.

Enter a new budget crisis. Many states were counting on a six month extension of a certain temporarily increased medicaid matching rate authorized by the federal stimulus package. Both the U.S. House of Representatives and the Senate wanted this to happen, and passed very similar but as nearly always, slightly different versions of the package, known as the Federal Medical Assistance Percentages or "FMAP." The resolution of the details is taking a long time, and the 30 states, including Massachusetts, are put in a dangerous position as the fiscal year comes to an end and the budget must be balanced. 

Secretary of the Executive
Office of Health and
Human Services for
Massachusetts JudyAnn Bigby
In Massachusetts in particular, Secretary of Health and Human Services Dr. JudyAnn Bigby laid out the details and the bottom line: the resulting shortfall is projected to cause a $608 million gap, which would require an additional 3.6% reduction in spending in a budget that has already been cut several times. That reduction would have significant negative impact on public services in health care, education, economic development, public safety, and beyond, touching every part of our society and economy including the most vulnerable and those who support and care for them. 

What does the FMAP crisis have to do with business leadership? Business leaders generally understand that they have an enormous interest in seeing their state's core functions - social services, infrastructure maintenance and healthcare systems to name three - are operating at their very best capacity. The cuts that will result if FMAP is delayed would put that reliability at risk along with potentially thousands of jobs. The ripple effect would reach employees, customers and partners almost immediately.

Individual business leaders - CEOs, senior executives, major investors, entrepreneurs - all have enormous influence in our society. Critical moments like this one are important times to use it. 

Your United States Senator will listen if you call and write to say that your business depends on continuity in essential state services and this basic federal funding package simply has to get authorized and distributed immediately as planned or people will suffer and business will be negatively impacted at an already fragile time.

How about some examples? Here is a letter sent by Communispace CEO Diane Hessan to Senator Scott Brown, and here is one written by eScription Founder and former CEO Paul Egerman. Send us your letters and we will post them here as well.

Regardless of where you vote or operate your business, call your Senators and urge them to pass the Senate Substitute Amendment which restores language extending FMAP rates in H.R. 4213. The US Capitol number is (202) 224-3121. All the information you need to make your call easy is here courtesy of the Providers' Council, a network of social service providers who deeply understand this urgency.

For those of you in Massachusetts: Senator John Kerry has said he supports getting the FMAP funds released. Call to thank him for his support.

Senator Scott Brown has not made his position clear yet (PBLN's letter to Senator Brown is right here). Call to ask him to get the FMAP funds released for Massachusetts families and businesses.

Please take a moment to contact both of them immediately

If business leaders rise to this challenge, it will make all the difference. 

Tuesday, June 8, 2010

Cape Wind and National Grid: How the New England Renewable Energy

On Wednesday, June 30th
PBLN held a special briefing at Akamai Technologies
on the technology, financing and partnerships behind America's first off-shore wind farm.
Jim Gordon
CEO, Cape Wind

Richard Rapp
Senior Vice President
 for Energy Portfolio Management, National Grid

with Moderator Carl Ferenbach
Managing Director, Berkshire Partners & Chairman, 
Board of Trustees, Environmental Defense Fund

and Host Paul Sagan
President & CEO, Akamai Technologies

This special Presentation was a program of PBLN's Energy and Environment Working Group,
led by Mitch Tyson (CEO, Advanced Electron Beams) & Roger Freeman (Managing Director, Solventerra)

To learn more, read PBLN's position statement and read PBLN’s blog posts about Cape Wind and PBLN's emphasis on creating a renewable energy economy.

Hospital CEO Levy: Time to Change how we set Hospital "Payment" Rates (End free market approach and insist on complete and total transparency)

Know that feeling of reading a blog post that makes you feel smarter but also makes you want to learn more, hear more? Paul Levy is President and CEO of Boston-based Beth Israel Deaconess Medical Center (BIDMC) and for a long time he has also been that kind of blogger under the banner "Running a Hospital." (Two disclaimers that may be unnecessary -  This author's father is employed by the BIDMC and Levy is a PBLN member since 2009). 

BIDMC President Paul Levy with WBUR executive John
Davidow at the 2009 PBLN Summit at the John F.
Kennedy Presidential Library in Boston
In today's post ("Three ways to set payment rates") Levy blogs about one of his core business issues, where even Massachusetts, pioneer in so many aspects of healthcare policy, seems to be stuck. The topic? Hospital "reimbursement rates" aka "payment" rates and how they are set. With links to prior posts and examples from other states, the post is an important read. The upshot? Levy says let's move away from a "free market" approach where insurers set rates that hospitals get paid for treating patients. Replace it with what? That's why you have to read Levy's post. There are models out there to be studied. 

Levy stresses that any model absolutely must have total transparency. To quote him on this point because he says it so clearly, "The final requirement, which must be added to any of three concepts above, is absolute, complete transparency of payment rates. That, more than any rate-setting formula, is likely to drive all rates to the mean, eliminating the huge disparity that exists today. There is no reason not to put it in place immediately while we debate the rate-setting process."

Levy also calls for a public forum on this topic. This is perhaps something that PBLN should convene (our thought not his). And given the nice shot of Levy with WBUR exec John Davidow from last year's PBLN Boston Summit, maybe WBUR would like to partner in bringing such a discussion to the web and airwaves? John?

Monday, June 7, 2010

PBLN Exec on Of Cuban Missiles and Chinese Wind Turbines

Markey addresses the 2010 PBLN
Washington Summit on Capitol Hill
Technology executive Ray DeMeo (left) talking policy and
innovation  in Washington with Recombinant Data
Managing Director Aaron Abend (right).
Old enough to remember the spectre of Soviet missiles pointed at the United States from nearby Cuba? Maybe just studied it in school? Congressman and House Energy Chair Ed Markey (D-MA) made an analogy between the windblades being made in China, pointed (in his words) at the US economy and those Soviet missiles pointed at US cities. A provocative image, Markey is deeply concerned about the future of the US economy - and worries that incumbent energy industries are blocking emergence of the clean energy economy like the phone companies tried to block the internet.

Communispace CEO Diane Hessan and Tufts Health Plan CEO
Jim Roosevelt with Markey at PBLN's 2010 Washinton Summit
Ray DeMeo, a PBLN member and veteran tech exec with 20 years of experience bringing US tech companies to Asia, offers a PBLN response on high-tech news site today. Ray has a slightly different way of making essentially the same point about the impact of the exploding Chinese clean energy effort. As he writes, he sees the threat lurking within the US - in the political and private sectors - where we cannot get our act together to forge a strategy for our own energy future. No-one knows this better than Markey who authored the energy bill, known as Markey-Waxman, that passed in the US House of Representatives and awaits a vote in slightly different form in the US Senate. Both Markey and DeMeo reflect the urgency of re-inventing the US energy economy and not just a new version of "missile defense." This is the urgency that drives PBLN support for Congressional action to put a price on carbon emissions and our enthusiasm for the entrepreneur-driven, government approved marvel that is the Cape Wind project. The US can either lead in this area or play catch-up with tremendous instability and uncertainty resulting. Our choice. Innovators want to lead. It is now a question of whether President Obama, Congress and the incumbent energy industry will let them.

Wednesday, June 2, 2010

PBLN Goes to School: Business Leaders Field Visit to Boston's Burke High School

"Turnaround" Headmaster Lindsa McIntyre (right) guides
Gloria Larson and PBLN around Boston's Burke High School
PBLN Education Chair Gloria Larson (day job: President of Bentley University) led a delegation of 20 PBLN members and friends to the Burke High School in Boston's Grove Hall section of Dorchester. The Burke has been designated a turn-around school in a new series of federal/state rubrics that bring resources, extraordinary latitude for change, and innovative strategies to schools that have simply not been getting good enough results. Schools around the country have received a new chance to succeed through the turnaround program.

The Turnaround artist and experienced change agent brought into the Burke by Boston Schools Superintendent Dr. Carol Johnson is Lindsa McIntyre. After just two hours with her in which key issues, data and part of the way forward were laid out for our group, Gloria Larson described McIntyre as a "force of nature."

More detail to come on the issues raised, potential partnerships explored. But suffice it to say that it was a very valuable use of time for all involved. Simply put, we are all failing these children, and we are crippling our regional economy by failing to fuel the workforce we need to drive the great companies that are located here. Even with all the new teachers, methods and resources at the Burke, Headmaster McIntyre identified attendance as the number one challenge. If they cannot keep the kids in school to try to ignite a passion for learning, they cannot deliver the results we all demand. We are all looking at strategies to help meet the needs that Lindsa and her team identified, and also how the outcomes she is seeking drive the needs and priorities of the business community and the economy. More on this to come. Thank you to the Burke High School students, faculty and staff for welcoming PBLN!

Hearing a teacher's call for more classroom partnerships
 with science-based companies
In typical fashion for our team, this visit came together because many people stepped up and stepped out of role given what their busy day jobs are like. Among those to thank, in addition to Bentley University President Gloria Larson and the entire Burke School community: Eos Foundation President Andrea Silbert, Castle Group Co-Founder and Principal Sandy Lish, Boston Superintendent of Schools Dr. Carol Johnson, PBLN Education Coordinator Christine Williams of Bentley University, and PBLN President and Eduventures, Inc. CEO Tom Dretler.

This field visit was part of an ongoing initiative of the PBLN Working Group to understand and contribute to dramatic improvement in K-12 innovation. Part of that effort has been ongoing participation in the Race to the Top initiative to secure newly available funding for school innovation from the Obama Administration. For more information on PBLN's history with education reform see our website at

Tuesday, June 1, 2010

PBLN in the News

WBUR | November 2, 2010
Some Companies May Reject Job Seekers Who Smoke
PBLN Executive Director Andy Tarsy is interviewed on WBUR's Radio Boston show on the new Mass Hospital Association policy to ban hiring of smokers.

Boston Business Journal | October 15, 2010
Brown at center of local cleantech lobbying efforts
PBLN central to lobbying focus on US Senator Scott Brown around clean energy issues

Boston Globe | October 10, 2010
PBLN Summit: Doing Better Business

Mass High Tech - The Journal of New England Technology | July 20, 2010
Progressive Business Leaders Network backs ed standard
Coverage of PBLN's public position in support of the adoption of the Common Core K-12 Education standards for Massachusetts schools.

Boston Globe |  July 1, 2010
Cape Wind gets a boost from CEOs
A recap from PBLN's forum,
Cape Wind and National Grid: How the New England Renewable Energy Deal of the Century Is Getting Done hosted by PBLN member Paul Sagan, chief executive of Akamai Technologies Inc. Read the full article.

Mass High Tech - The Journal of New England Technology |  June 30, 2010
Cape Wind's Gordon appeals to execs for NStar support
A recap from PBLN's forum,
Cape Wind and National Grid: How the New England Renewable Energy Deal of the Century Is Getting Done hosted by PBLN member Paul Sagan, chief executive of Akamai Technologies Inc. Read the full article.

Boston Herald |  June 21, 2010
Wired for progress
PBLN Executive Director Andrew Tarsy's letter to the Editor in the Boston Herald. Read the full article.

Cape Cod Times |  June 19, 2010
Wal-Mart takes on Cape Wind
By Patrick Cassidy
PBLN executive director Andrew Tarsy makes the business case for Cape Wind, saying the project represents a much-needed boost to the state's renewable energy industry. Read the full article.

Boston Globe |  June 17, 2010
Wal-Mart challenges Cape Wind’s high prices
By Erin Ailworth
PBLN Member George Matouk (President, John Matouk & Co.) advocates for Cape Wind, saying it will help Massachusetts build a clean energy economy and become less dependent on fossil fuels. Read the full article.

Daily News Transcript |  June 16, 2010
Senate vote stirs anxiety over Federal health care funds
By Michael Norton and Kyle Cheney
PBLN Board Member Diane Hessan (CEO, Communispace Corporation) calls for Congressional action on federal health funding for healthcare, basic services, infrastructure in Massachusetts. Read the full article.

Xconomy |  June 7, 2010
Of Cuban Missiles and Chinese Wind Turbines
By Ray DeMeo
PBLN Member and technology exec Ray Demeo's Xconomy piece on the need for clean energy production. Read the full article.

Boston Globe | May 25, 2010
Cape Wind courts NStar for utility contract -  deal key to getting construction funds
By D.C. Denison
"...Andrew Tarsy, executive director of the advocacy group Progressive Business Leaders Network...characterized Cape Wind as 'a symbol of the energy future.'" Read the full article.

May 22, 2010
Vertex Founder Joshua Boger Charges up Wesleyan Grads
These remarks were given by PBLN co-chair and former Vertex CEO Joshua Boger to Phi Beta Kappa inductees at Wesleyan University on May 22, 2010. Read full remarks.

Boston Globe | May 22, 2010
NStar, Cape Wind to talk energy -  utility says it would consider contract to buy electricity
By Erin Ailworth
"Andy Tarsy, executive director of the advocacy group Progressive Business Leaders Network, which has supported Cape Wind, said the local business community is watching NStar closely to see what it will do about Cape Wind." Read the full article.

Mass High Tech - The Journal of New England Technology | May 19, 2010

Deepwater Horizon: Complicating New England's Chances for a Climate Change Bill
Mass High Tech piece by PBLN member and Political Outreach Coordinator Matt Henshon (Founder, Henshon Parker LLP) on the PBLN Summit and the impact of the Deep Water Horizon rig spill on energy politics in DC. Read the full article.

Boston Globe | May 18, 2010
Pics from CEO field trip to Washington
Boston Globe's Scott Kirsner (Innovation Economy) blogs w/ pics about the CEO field trip to D.C.Read the full article.

Cause Nation | May 17, 2010
Weighing in on Scale
PBLN member Nikki Korn's blogpost on the "Cause Nation" blog run by Nikki and her colleagues at Cause Consulting, where she is a Principal and works with Adobe, Aramark, Boston Beer Company and other national brands. Read the full article.

Boston Globe | May 12, 2010
Our energy use calls for a transformation
Andrew Tarsy & Mitch Tyson, letter to the editor
"THERE IS no denying that the rate for electricity in 2013 when Cape Wind switches on will be pennies per kilowatt higher than prices today. But energy economics require a deeper look. For example, what about long-term job creation and economic development? What about the anticipated sharp rise in oil and gas prices as the global economy recovers?" Read the full letter.

WBUR | May 12, 2010
Insurance Coverage Alone Won't make Us Healthy
WBUR (Boston's NPR News Station) healthcare blog "CommonHealth" has a guest blog by PBLN member J.J. Bartlett who is CEO of Fisherman Partnership Health Plan. Read the full article.

Seeing Both Sides | May 11, 2010
Barney Frank says: Don't Mess with VCs or Angels
Jeff Bussgang (General Partner, Flybridge Capital) blogs on financial reform talk with Barney Frank.Read the full article.

Mass High Tech | May 7, 2010
Jeff Bussgang, on public policy’s help/hinderance to entrepreneurs
Mass High Tech posts Tarsy/Bussgang conversation about going to D.C. Read the full article.

Boston Globe | April 29, 2010
Decision puts the state at the forefront of wind industry, business leaders say
By Erin Ailworth
“[New jobs from Cape Wind ] span the spectrum from blue collar to white collar,’’ said Roger Freeman (Managing Director, Solventerra) of the advocacy group Progressive Business Leaders Network, which has supported Cape Wind. “It’s boatmen taking boats out there. It’s blue-collar workers turning the wrenches. It helps build Massachusetts as a cluster and a center for renewable energy." Read the full article.

Boston Globe | November 21, 2009
Massachusetts Health Care Providers Urge Revamping Payment System
Robert Weisman
"Whether the state’s proposed payment system overhaul can succeed in reining in costs and boosting the quality of care will depend on how it’s structured and put into practice...was the consensus of speakers on a health care panel yesterday during a summit on business leadership and public policy at the John F. Kennedy Library in Dorchester." Read the full article.

XConomy Boston | November 24, 2009
Progressive Business Leaders Meet for "Davos on The Charles" Policy Summit
Jeff Bussgang
"The Progressive Business Leaders Network (PBLN) summit convened last Friday at the JFK Presidential Library represented a unique blend of over 200 leaders engaged in the thorniest of policy issues that are facing the Commonwealth and the nation." Read the full article

Vertex Founder Joshua Boger Charges up Wesleyan Grads

The following remarks were given by PBLN co-chair Joshua Boger to Phi Beta Kappa inductees at Wesleyan University on May 22, 2010.
Vertex founder and former CEO Dr. Joshua Boger
 at the PBLN Washington Summit May 2010

Sustainability, Justice and the Corporate Mission

Congratulations to you, the newest inductees into Phi Beta Kappa. My guess, though, is that this hasn’t really been a key goal in your life. It is what we in pharmaceutical development call a “surrogate marker”; attaining Phi Beta Kappa is a measurement, a marker, toward a mission or goal. The lowest LDL cholesterol is of no intrinsic value. But it is a pretty good predictor of cardiovascular health. It is “health” that is the goal, and low LDL doesn’t guarantee that health. Phi Beta Kappa – apart from the cool, secret live-long-and-prosper handshake – is a marker of accomplishment that portends…what? For most of you, I guess that “what” is a large positive impact in the world. For some, that necessarily means working in – maybe even starting – some “non-profit” organization. That’s great. Do that. For others of you, some almost apologetically [“I’ll make some money and then I’ll join you…”], your near-term goals involve a for-profit entity. But, you insist, “I won’t go corporate…” or , lamely, “Uh, it’s a means to an end…”

Corporations exist to make money, right? Everybody knows that the dominant responsibility – maybe even the only responsibility – of a public company is to provide a financial return to its shareholders.

Milton Friedman famously opined,
Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.
Milton Friedman
Capitalism and Freedom, 133 (1982)

Everybody believes this to be the essence of capitalism. Except it’s not true.

We live in a time when the popular feelings for “business” are anxious and confused. Indeed, that uneasiness extends to the unhappy relationship between economic measurements and life’s values. As The Onion, that tongue in cheek journal-of-record headlined a few years ago, “Cost of Living Now Outweighs Benefits.”

There are few epithets slung with more venom than “large corporation”, yet, our society virtually worships the output of these same said Satans. Everybody hates Bank of America but loves the ubiquity of their ATM’s. Ordinary and even extraordinary people, contentedly employed by large corporations, will nevertheless join in the mudslinging, as if their own paychecks – and they themselves – were somehow exempt from besmirchment.

Now, you may be saying, “But some corporation are really greedy and evil…” And I suppose that might be true [although personally I think there are even more simply-stupid corporations, a passel of silly ones and quite a number of boring ones…], but it hardly justifies a categorical condemnation. There are certainly “greedy and evil” people, but that hardly justifies so characterizing the entire human species (…even if we of European descent are 5% Neanderthal). Among those with a penchant for linking “evil” and “corporation”, there is even a sense of disdain for the counterexamples, for companies with a social conscience. They roll their eyes at the Ben & Jerry’s of the world, adding “harmless hippie exception” to their corporate epithets. They are certain that all real corporations cravenly seek only profits, at any cost and without distraction, as a matter of mission, even of legal requirement. But it is not true.

A corporation is a particular and special legal entity. Not simply a business enterprise, a corporation is a special legal construction, chartered [for US corporations] under the specific laws of a chosen state. The state laws governing incorporation convey rights and responsibilities on a chartered corporation. In many ways, those rights and responsibilities mimic those of an individual, creating of a collection of individuals – the owners – a distinct new and novel individual, the “corporation”. The laws of incorporation convey certain privileges upon the corporate individual, such as favorable tax treatments and protections from certain liabilities. But these corporate privileges are not gifts from society. A corporation has responsibilities as well as privileges. The social contract goes both ways, although, in some states, the full scope of that social contract is not made as explicit as it might be.

Vertex Pharmaceuticals, a company I founded 21 years ago, is incorporated in the Commonwealth Massachusetts, a state that has, admirably, been explicit about the responsibilities of corporations. Indeed, even in its official moniker as a “Commonwealth”, Massachusetts signals to all that government isn’t about enabling special privilege but about assuring the common good. The English noun “commonwealth” dates from the fifteenth century usage “common weal”, meaning “common well-being”.

Those responsibilities and expectations are most particularly described in the responsibilities and expectations of the corporation’s directors, the individuals who ultimately run any corporation. Massachusetts Chapter 156D, Section 8.30, General Standards for Directors, gets right to the point in subsection a3: “[A director shall discharge his {sic} duties as a director, including his duties as a member of a committee…] in a manner the director reasonably believes to be in the best interests of the corporation. In determining what the director reasonably believes to be in the best interests of the corporation, a director may consider the interests of the corporation’s employees, suppliers, creditors and customers, the economy of the state, the region and the nation, community and societal considerations, and the long-term and short-term interests of the corporation and its shareholders ...”

So the next time you hear that “the only thing corporations are interested in is making money…” you can respond: “Maybe that’s true where you live, but it’s not either the truth or the law in Massachusetts.”

Or in Connecticut, in New York, in Illinois, in New Jersey, in Pennsylvania, in Florida and in about half the states. Even in Arizona!

Beginning in the 1960’s, a large body of economic and legal theory around “non-shareholder stakeholders” led to enactment of “corporate constituency statutes”, like the one quoted for Massachusetts. Pennsylvania led the way in 1983, and more than half the states have these kind of statutes. These generally give Directors permission to consider a wide variety of non-shareholder stakeholders. Connecticut and several other states go even further requiring Directors to take into account non-shareholders stakeholders, although they offer little guidance as to how that is to be done.

California, which so far avoids these subversive ideas (and requires all corporations to take a Milton Freidman-like approach), is now considering allowing self-designation of a “Benefit Corporation, or “B-corporation” which would be certified on a societal benefit rating scheme – a “B Impact Rating System” – that would require such B-corporations to name at least one non-financial societal or environmental purpose for which the corporation exists and can be measured and held accountable. This designation would then offer these B-corporations a "safe harbor" from torch-bearing mobs of Friedman-worshipping shareholders.

But it is not only lawyers and politicians forging the pathway toward greater corporate social responsibility and sustainability. Thousands of individual businesses across the country realize that is good business to consider “multiple bottom lines”, balancing social and environmental bottom line measurements with the financial bottom line.

A few years ago I co-founded and continue to co-chair a non-profit association called the Progressive Business Leaders Network. (see With about 100 members, mostly for now in Massachusetts, we are a “C-level” (i.e., CEO’s and top officers) support group across a wide range of “for profit” companies – large and small – involved in education, energy & environment, healthcare, housing and economic development.

As noted on the web site:
PBLN’s mission is to promote the best practices of business leaders committed to socially and environmentally responsible economic growth and the public policies that advance it.

[PBLN Members believe:]
PBLN Statement of Values
  • Fiscal discipline is a cornerstone of responsible public policy.
  • There is a need for greater social, economic and environmental justice.
  • Healthy economic growth is both robust and environmentally sustainable.
  • Governments are indispensable regulators of fair, transparent and sustainable markets.
  • Private sector leaders have a unique ability and, therefore, responsibility to contribute to public policies that promote healthy economic growth, effective government and greater social justice.
  • Public and private sector leaders should partner to develop policies which encourage commercial ventures that have clear social and environmental benefits (such as affordable health care, affordable housing and “green” technologies).
And implicit in the PBLN code of values is the notion that these values are “good business”. Sustainability requires these values. Businesses that eschew these values will fail as surely as those household names who failed us all in the recent economic crisis.

Vertex Pharmaceuticals Incorporated was founded and operates on the following publically-disseminated mission:
to redefine health and transform lives 
with new medicines.

Nothing in there about earnings per share. Oh, don’t misunderstand, we expect to make money, but the purpose of profits to Vertex is to sustain and enhance investment in innovation that redefines what it means to be healthy and to transform lives in need of new medicines. We serve society.

And this isn’t a new idea. I didn’t make it up.

In 1950, George Merck, CEO of the multinational pharmaceutical company, Merck, that would go on in subsequent decades to become not only fantastically successful but also, by the 1980’s, America’s Most Admired company, addressed the graduating class at the Medical College of Virginia in Richmond. A main topic of his speech was the now-accepted idea that great and original research could indeed take place inside the walls of a company. But he went on to lay out some principles of the business of Merck as well.

Noting that business even then was often mis-perceived as being all about profits (although he clarified unapologetically that there can be no business – and no future – without profits) he uttered the famous lines,

“We try to remember that medicine is for the patient. We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear.”

Now if that wasn’t radical enough…and by itself it could be dismissed as social responsibility when convenient: country club liberalism…he went on and made the quantitative economic assertion:

“The better we have remembered …[that medicine is for the patient], the larger [the profits] … have been.”

So, George Merck claimed, patient centered drug innovation isn’t just a possible business model, it is the best business model. And wading right into what sounds like a 2008 campaign statement on healthcare reform:

“How can we bring the best of medicine to each and every person? It won't be solved by wrangling with words and it won't be settled by slogans and by calling names. We will fall into gross error with fatal consequence [fatal consequences!!] unless we find the answer - how to get the best of all medicine to all the people.”

Then calling out to his fellow industry leaders:

“… We cannot step aside and say that we have achieved our goal by inventing a new drug or a new way by which to treat presently incurable diseases…. We cannot rest till the way has been found, with our help, to bring our finest achievement[s] to everyone.”
George W. Merck
Medical College of Virginia (Richmond), 01 December 1950.

The secret business ingredient – for companies in every sector of the economy – is the same one as it was in 1950: customer and society focused innovations that bring real value across society.

Innovation of high value to society is not only a viable business plan, it is the best (and maybe the only) sustainable business plan….for-profit or not-for-profit.

The noblest and most admirable instinct of your generation is to embrace a mission greater than yourself.

Naked self interest is so last millennium.

Find the joy of social justice wherever you can, and demand that mission of wherever you work.