GAIL North America Regional Event

The GAIL North America Regional Board held their webinar, Values-Driven Governance Models: Perspectives from Practitioners & Business Leaders Relating to Governance Models of Mission-Driven Companies on 25 June 2024.

Our panel of experts shared their knowledge and experiences on governance models for mission-driven companies. They provided valuable insights into navigating legal considerations and practical aspects of forming and maintaining values-driven organisations.

Moderated by Amy (Wojnarwsky) Willey, Partner at McDonald Hopkins LLC. Featuring panellists;

  • Elizabeth Lange, Partner at Faegre Drinker
  • Lynn Carpenter, Co-Founder at EPOCH Pi | Purposeful Investment Bank, and
  • Clark R Arrington, General Counsel of Obran Cooperative

Panellists discussed the distinctions between various governance models, focusing on benefit corporations, certified B corps, and cooperatives. They shared their experiences and strategies for integrating values into business culture to ensure mission-driven companies thrive.

Overview of Webinar, Values-Driven Governance Models: Perspectives from Practitioners & Business Leaders Relating to Governance Models of Mission-Driven Companies

This webinar, hosted by GAIL North America, featured a panel of practitioners and business leaders discussing governance models for mission-driven companies. Moderated by Amy Willey, the event included insights on legal structures, certification processes, and practical applications of values-driven business models. The panellists were Elizabeth (Lizzy) Lange from Faegre Drinker, Lynn Carpenter from Epic Pi, and Clark Arrington from Obran Cooperative.

Key Points

Legal Structures for Governance Models by Elizabeth Lange

Lizzy Lange clarified the distinction between certified B Corporations and legal benefit entities:

  • Certified B Corporations – Certification conferred by the U.S. nonprofit corporation B Lab that meets a high level of social and environmental performance, and makes a legal commitment to consider all stakeholders. 
  • Benefit Corporations and Benefit LLCs – Legal forms authorised by state law, allowing consideration of all stakeholders.
  • Common Legal Structures – Discussed various models including benefit corporations, benefit LLCs, social purpose corporations, L3Cs, and standard LLCs.

Employee Ownership Models by Clark Arrington

Focused on worker cooperatives and other employee ownership structures.

  • Worker Cooperatives – Companies owned and governed by employees.
  • ESOPs – Employee Stock Ownership Plans providing tax advantages and promoting employee ownership.
  • Profit Sharing Plans and Employee Trusts – Methods to involve employees in company success.

Purpose-Driven Investment Banking by Lynn Carpenter

Shared the journey of founding Epic Pi, a certified B Corp investment bank focused on purpose-driven businesses.

  • Conscious Capitalism – Emphasised principles of higher purpose, conscious leadership, and stakeholder approach.
  • Impact of B Corp Certification – Enhanced credibility and attracted clients aligned with their values.

Governance Models in Practice

The panel discussion explored practical applications and the importance of aligning company values with governance structures.

  • Mission Lock – Ensuring that companies maintain their values through legal structures like benefit corporations.
  • Cultural Alignment in Transactions – Importance of pre-negotiation screening to ensure alignment between companies and investors.

Environmental, Social, and Governance (ESG)

  • Lizzy Lange highlighted the cross-disciplinary nature of ESG and its importance in long-term value creation.
  • Advising on ESG involves understanding client goals, risk evaluation, and integrating ESG into business strategies.

Closing Thoughts

  • Lynn Carpenter emphasised long-term success and values alignment in transactions.
  • Lizzy Lange advocated for integrating ESG considerations in all stages of deals.
  • Amy Willey highlighted the importance of discussing the profitability of values-driven businesses.
  • Clark Arrington stressed the need for ongoing education and offering diverse business models.

Audience Engagement

The panel addressed questions on employee ownership and ESG, sharing insights on integrating these concepts into client conversations and staying informed about evolving trends.

Conclusion

The webinar underscored the growing relevance of values-driven principles in business governance. The panel encouraged ongoing education and proactive discussion of these concepts to drive successful, impactful business strategies.

Amy Willey (Moderator)

Member of McDonald Hopkins’s Business Department and Mergers and Acquisitions Practice Group and GAIL North America Board Member

Amy Willey is a Member in McDonald Hopkins’s Business Department and Mergers and Acquisitions Practice Group and is Chair of the firm’s ESG practice area. Her practice is focused on representing both strategic buyers and sellers including private companies and private equity funds in various types of transactions, and providing general corporate counseling to a variety of middle market businesses on matters relating to general corporate governance, commercial contracts, operational issues, and ESG initiatives.

Elizabeth Lange

Partner at Faegre Drinker Biddle & Reath and GAIL North America Chair

Elizabeth Lange represents public and private clients, including Fortune 50 and startup companies, in mergers and acquisitions, governance, and other corporate and securities matters. Recognized for her involvement in social enterprise and impact finance law, Lizzie has written extensively on legal and regulatory issues relating to social enterprise legal forms.

Experienced in complex transactions, Lizzie has represented clients in transactions with deal sizes ranging from several million dollars to over $1 billion. Lizzie works with companies in a variety of industries and focuses her practice on mergers and acquisitions, venture capital/corporate venture capital and emerging companies, corporate restructurings, private securities offerings, divestitures and general corporate matters. Lizzie also represents various benefit corporations and emerging venture-backed companies. Lizzie co-leads the firm’s full-service ESG practice. She draws on more than a decade of experience helping clients in the social impact space, and served on the Faegre Drinker team that created the benefit corporation legal form that has been adopted in more than 35 states. Lizzie regularly advises companies on ESG matters including ESG strategy, policies, disclosure and reporting, frameworks and standards, and compliance. From start-ups to well established organizations, companies trust Lizzie to guide them on benefit corporation and B Corp matters.

 

Lynn Carpenter

Co-Founder at EPOCH Pi

Lynn is a co-founder of EPOCH Pi, a B Corp investment bank dedicated to supporting purpose-driven, values-led companies in selling their businesses or raising capital. At EPOCH Pi, we believe in creating value for all stakeholders, ensuring that transactions not only maximize financial value but also preserve company culture and continue making a positive difference on employees and communities. Utilizing proprietary culture tools and bringing a unique perspective aimed at understanding cultural and philosophical differences, EPOCH’s process helps clients achieve their goals while upholding their core values and mission, improving outcomes for all parties involved. Lynn brings over 20 years of investment banking, private equity, and commercial banking experience to the team.

 

Before founding EPOCH, Lynn spent 13 years at Candlewood Partners, a middle market investment bank, and South Franklin Street Partners, its private equity affiliate. Before that, she worked at Morgenthaler Partners, The Fountains Retirement Communities, and KeyBank.

 

Clark Arrington

General Counsel at Obran Cooperative