Exploring structures for enduring purpose

Welcome to Legacy Beyond Profits, where we explore what it really means to build a business that leaves a mark for the right reasons.

Your corporate structure shapes your destiny more profoundly than any strategy document. Most executives operate within legal frameworks that create an irreconcilable tension: maximize shareholder value or serve broader stakeholder interests. Choose wrong, and you risk lawsuits. Choose right, and you risk irrelevance.

Today, we explore how innovative firms use B Corps, Benefit Corporations, and Perpetual Purpose Trusts to overcome this conflict by legally integrating mission, thus ensuring its survival despite market forces, leadership changes, or takeovers.

The structural purpose imperative

1. Why traditional structures sabotage purpose

Standard C-corporations and LLCs weren't designed for stakeholder capitalism — they were optimized for 19th-century capital accumulation. This creates legal obligations that directly conflict with long-term purpose, forcing even principled leaders to prioritize shareholder returns over stakeholder welfare.

The Ben & Jerry's acquisition illustrates this structural trap. Despite founders' resistance to preserve social mission, shareholder lawsuits forced sale to Unilever. Traditional fiduciary duties made purpose subordinate to profit by law, demonstrating how structure determines outcome regardless of intention.

2. B Corps

B Corporation certification adds third-party verification to existing structures without changing underlying legal obligations. Companies undergo assessment across governance, workers, community, environment, and customers every three years, creating transparency that traditional businesses avoid.

While certification alone doesn't alter fiduciary duties, B Corps must amend governance documents to consider stakeholder interests. This creates some legal protection for purpose-driven decisions while building brand differentiation through verified impact. The real power lies in attracting aligned stakeholders who value authenticated purpose over pure returns.

3. Benefit Corporations

Available in 37 states, Benefit Corporations expand legal duties beyond shareholders. Directors must consider all stakeholder impacts when making decisions, with court-defendable rationale for choosing long-term value over short-term profits.

This structure requires pursuing "general public benefit" alongside profit, with annual reporting on purpose achievement. Unlike B Corp certification, Benefit Corporation is a legal form providing structural protection against shareholder primacy. Companies can combine both for maximum accountability — legal structure plus third-party verification.

4. Perpetual Purpose Trusts

Perpetual Purpose Trusts represent the most radical reimagining of ownership. A trust owns the company with legal obligations to pursue specific purposes forever. Profits fund mission rather than enriching owners, preventing both financial exits and purpose drift.

These structures require sophisticated design balancing permanence with adaptability. Governance must enable strategic evolution while preventing purpose abandonment through independent trustees, specific mandates, and operational oversight mechanisms. Patagonia's model proves operational excellence can thrive within mission-locked structures.

5. Communicating structural choices effectively

Alternative structures require translating legal complexity into stakeholder value. Employees need to understand how structures protect their interests during downturns. Customers want assurance that values alignment has legal weight. Investors must grasp how purpose enhancement creates sustainable returns despite liquidity constraints.

Focus communication on practical implications rather than technical details. Explain how benefit corporation status protects social programs from cost-cutting pressures. Demonstrate how trust ownership ensures permanent customer values alignment. Show how B Corp certification creates competitive advantages through verified differentiation. The message: structural choices aren't anti-business but pro-stakeholder.

How The Scott Trust guards journalistic independence

When financial crisis threatened The Guardian in 1936, its owners chose radical preservation over profitable exit: transferring ownership to a trust mandated to protect editorial independence in perpetuity. This decision created a structure that has safeguarded journalistic integrity through nearly a century of industry disruption.

The Scott Trust's governing documents subordinate commercial success to journalistic purpose. Trustees cannot profit personally, must reinvest surpluses in journalism, and face legal obligations to maintain editorial independence regardless of commercial or political pressure. Structure creates unbreachable walls around mission.

This framework's power emerged during the Edward Snowden revelations. While government threats and commercial concerns might have silenced traditionally-owned outlets, The Guardian's trust structure enabled publication without fear of shareholder revolt or hostile takeover. Legal architecture protected journalism when journalism mattered most.

The competitive advantages prove purpose structures enhance rather than compromise performance. Readers trust independence that's legally guaranteed. Elite journalists choose The Guardian knowing investigative work won't be sacrificed for advertiser comfort. Sources share sensitive information confident that commercial pressure can't kill stories.

The Guardian's digital transformation demonstrates how patient capital enabled by purpose structures outperforms quarterly capitalism. While competitors chased short-term metrics, trust ownership provided runway for digital investment that now positions The Guardian among global media leaders. Purpose alignment attracted technology talent, building capabilities that profit-maximizing outlets struggled to develop.

From strategy to legacy

"Corporate structure is destiny." Legal scholar Lynn Stout understood what most executives miss: the frameworks we inherit shape every decision we make. Traditional structures evolved to concentrate wealth, not create it sustainably.

The most enduring legacies aren't built on promises but on structures that make purpose permanent. When pressure peaks — and it always does — legal obligations trump noble intentions. Choose your structure wisely. It determines whether you're building a legacy or just managing an exit.