a NEW STOCK EXCHANGE WHERE PEOPLE & THE PLANET MATTER

MEASURING & REWARDING SOCIALLY RESPONSIBLE BEHAVIOR

No financial institution has come to epitomize the worst of the current system more than the speculation driven excesses of stock exchanges. Exchanges have been called nothing more than gambling casinos favoring insiders who increasingly appear to control the game.

Stock exchanges should fill a vital role in providing businesses with capital. Yet they seem consumed with the buying and selling of exotic financial instruments from which vast fortunes are made, often at the expense of others.

It is not just the financial manipulators that benefit while hurting the rest of society. Companies listed on those exchanges are caught up in short-term profit-driven behavior that trumps all other objectives, resulting in unparalleled influence over our governments, the despoiling of our environment and the destructive cycles of our economies.

What is needed is a new kind of stock exchange that returns to the fundamental role of providing capital to companies and is an honest arena for shareholders to buy and sell their ownership interests. It should also be one that rewards the corporate behavior that benefits society and the planet.  >>More

Corporations, like people, behave according to how they are measured. Today short-term profits are the primary measurement, resulting in corporate behavior that is detrimental to the public and the planet.

To change behavior, we need to change the way corporations are measured and tie their valuations to how well they pursue those measurements.

The investment community has begun to demand that corporations be measured on environmental, social and governance (ESGs) parameters as well as financial parameters. The World Federation of Exchanges (representing over 50 exchanges) recently issued a report calling for enhanced use of key performance indicators around ESGs by exchanges around the world.

The Hauser Center at Harvard's recently released report  “From Transparency to Performance: Industry Based Sustainability Reporting on Key Issues” also calls for widespread use of such indicators and recommends that a commonly accepted standard be adopted. The Commonwealth Group is working with others to establish a project to develop such a standard set of measurements for use with our UNIEX stock exchange.  >>More

PRIVATE EQUITY & VENTURE CAPITAL

PUBLIC BENEFIT BANKS PROVIDE BALANCE

The U.S. Small Business Administration estimates that over 70% of all new jobs are created by companies with fewer than 20 employees. To nurture job creation, we need to ensure that money is available to those small businesses.

The Conventional Funding Model outlines the challenges entrepreneurs face in trying to raise funds. We have developed another way to get capital into their businesses. Our Breakthrough Funding Model for Small Companies provides a means to bring institutional funds down into local, small companies, solving a key problem for both.

While we have built this program to specifically fit our CEED Program, the system has universal application. It aggregates a large number of investments in many small companies into a common entity that can go public, providing participants with the means to extract their investment capital without having to liquidate or sell the small companies that received the individual investments. At the heart of this approach is the idea of power in numbers, implemented in a structured way. >>More

Right alongside stock exchanges stand the mega banks, the “too big to fail” (or more correctly “too big to exist”) institutions that inflict enormous harm while pursuing their own interests.

They now appear to be primarily focused on their profits and are rarely fulfilling their mandate of providing the loans needed to keep our economies afloat. Such institutions may benefit their owners, managers and a limited number of others, but certainly not Main Street.

What we need is a new form of banking, designed to serve the rest of society and not a select few. We call this Public Benefit Banking and a nationwide movement is underway to establish this new form of banking.

Publicly owned banks lend in a socially, environmentally and economically beneficial manner while preserving the best of the conventional for-profit model. They can make loans that are not viable for private banks, such as alternative energy projects with long-term payback -- in fact, any projects that will yield a public benefit.  >>More

base of the pyramid

Microcredit has been successful in lifting millions of people in less developed countries out of poverty, especially women and their families. However, these microcredit beneficiaries usually do not build businesses that can be expanded or passed on generationally. That stratum lies just above the typical microcredit beneficiary and is off the radar for traditional funding sources like banks, finding itself just below the lowest layer normally served by those institutions. We see this gap being filled by two mechanisms.

The first is a BoP variant of our CEED Program and its unique funding model. That is, a program that can provide both funding and a support structure for new small businesses that would typically employ a number of workers and be capable of expansion.

Like the CEED Program model, this is best done with proven, replicable businesses models, the most successful of which is franchising. One problem with the micro-franchises now being promoted in the developing world is financing of the franchisees and the revenue sharing models of traditional franchises. The CEED funding model allows investors to realize profit other than through franchise fees and royalties alone, thus increasing microfranchising opportunities.

Companies in emerging nations can also benefit from the corporate cooperative model, banding together to secure access to the public capital markets and other benefits of public companies.

CORPORATE COOPERATIVES

legislation

Our unique funding model contains a key ingredient that can be a solution for another class of companies - existing small and medium sized companies who either need more capital to grow or need a means of allowing their investors to get their investment back with profit. Like the CEED Program, it aggregates multiple smaller companies into one or more larger ones, all built from the ground up rather than the top down (the current dominant theme).

We call this model “corporate cooperatives” in that it resembles cooperatives, which are normally a collection of individuals in some joint effort, but in this case the individual units are individual corporations who band together for their mutual benefit.

Cooperatives achieve critical mass and effectiveness by the aggregation of many individuals in such institutions as credit unions. Corporate cooperatives are intended to provide a group of smaller corporations a similar critical mass in the one area where they individually might not survive and succeed on their own – being a public company.

Public companies often wield far more economic clout than their private counterparts, primarily because they are able to access much larger amounts of funds, and usually at much lower cost, than private companies. That is because owners can freely buy and sell their ownership interest (shares) in those companies through the public stock markets, whereas the owners of private companies are very restricted in their ability to buy and sell their shares. Corporate cooperatives give the owners of those smaller companies the ability to own freely tradable shares.  >> More

We citizens can do many things for ourselves to change the economic paradigm, but some can only be done by our elected representatives at the state and federal levels.

We are working to introduce new -- and modify existing -- statutes to establish an environment that nurtures and supports our other efforts in creating a more socially and environmentally responsible business community. The key effort at the state level concerns state laws governing the creation of corporations and similar business entities, and in particular, the rules under which they must operate.

Corporations are created at the state level and given legal rights that make them nearly equivalent to human beings. In some ways they have more rights than humans, enjoying the benefits but few of the disadvantages. The key element that works against any movement toward triple bottom line management is that managers and directors are compelled to place profit and their shareholders above all else. By changing these regulations to encompass additional goals and stakeholders, we can change corporate behavior.

At the federal level, we have identified certain tax and securities laws that currently work against our goal of helping businesses large and small grow in socially responsible ways, and are working to secure modifications to these statutes.  >>More