Kim Jordan’s Take on “Business as a Force for Good.”

To whom much is given, much is expected. This value informed Kim Jordan’s leadership as the co-founder of New Belgium Brewing and is the philosophy behind the Mighty Arrow Family Foundation today. On April 11, Kim gave a speech about “Business as a Force for Good,” at Colorado State University’s College of Business. 

Below is a lightly edited transcript of Kim’s words that ask us: With whom will you align your talent? And are you using your head and your heart to do important and meaningful work that is congruent with who you need to be? We hope this will inspire you to do just that.

We are at a crossroads.

I’m excited to be here today to talk about one of my favorite subjects: Business as a force for good. 

In this journey of human existence, we are truly at a crossroads. It’s true, that’s trite… and something that we’ve heard before. This is a glorious miracle, being alive on Planet Earth, and we have always been on a journey; we’ve had a lot of twists and turns, with choices made along the way. Currently we are living in a period where one species—us—has made such an impact on our planet that weather has changed, geological forces like earthquakes have changed, the existence of large swaths of animal and plant species have changed, in fundamentally existential ways. We will need to rethink how we live in terms of cost-benefit to us and the planet, not as adversaries but as allies. Who do we want to be? And who do we need to be?

In the last 25 or so years, I believe that the environmental movement may have made a mistake when we put a singular focus on climate change as we raised our voices about our concerns. I know I have been guilty of that, and when you triage the world’s looming and existential root causes, a warming climate certainly rises to the top. We are coming to understand, though, that it’s all interconnected: Ocean acidification, shrinking of habitat, increased human inequity and stress, decreased soil health, drought, decline of species diversity. 

We are all in this together, the fungi, the humans, the oceans, the polar bears, the soil. We would be well served to craft our solutions with a strong bias toward our interconnectedness. 

According to the World Wildlife Fund, an average of 69% percent of our species have gone extinct since 1970. And the US Census Bureau reports that, in 2022, 3 million Americans were displaced because of natural disasters, with flooding being the biggest factor. It’s no surprise that the incidence of billion-dollar natural disasters, which is the threshold deemed significant, has increased in 10 of the last 11 years. According to NOAA, there were 10—billion dollar or more—natural disaster weather events per year between 2011 and 2022, excluding the anomalous 2014. There were 18 events in 2022 alone. There were only two years where we had 10 billion dollar plus events in the years between 1980 through 2010. All of these figures are calculated in 2022 dollars. In addition to the ominous warning signs for our planetary and human well-being, we have financial incentive to take action as well.

The socio-cultural outlook isn’t much better. Our commitment to ethics, decency, and the well-being of our communities feels shaky, and the practice of democracy as a fundamental, founding principal of our nation is imperiled as well. 

Life expectancy, among poorer people in the United States is decreasing, and deaths of despair are increasing. The gulf between the richest and the poorest is bigger than it’s ever been. Access to equity and other forms of capital to grow prosperity for our citizens is concentrated among fewer and fewer people.  

Business as a force for good.

Here’s my first example of what we did at New Belgium: Some of you may know that my sons and I sold the balance of our ownership to the New Belgium Employee Ownership Plan or ESOP in 2013. Over the years, our family started with selling 10% and then added an additional 22% to make it 32%, and then the company bought back some family shares and retired them making our co-workers the owners of 42 percent of the company. As our last move in 2013, we sold the balance of the company to the ESOP, making us truly 100% worker owned. 

Here was my CEO thinking: There was value in New Belgium, and I wanted my co-workers and management to feel the pressure that I felt for many years as an entrepreneur. That may sound weird or callous, but starting and growing a company is hard, hard work. And people need to have relentless commitment. 

So, I took a note for an agreed upon sales price, essentially with New Belgium. It had a low interest rate—about what a mortgage would have been at the time—but far below what a private equity deal would have required.

Why? Because it allowed my management team and me to grow the company without too much cash tied up in our note, and it allowed me to have some sense that my co-workers had skin in the game, that taking care of their business was an important outcome to be successful. 

In early 2019, New Belgium was at a crossroads, just like we are as humans. We had built a lovely, big brewery in Asheville North Carolina, competition in craft brewing was fierce, we had a lot of long-tenured co-workers who were wondering about the value of the company and their ability to cash out, and we had a note to my kids and me. That’s a lot of mouths to feed. We decided to see if we could find a partner with commitments to being a business role model—honoring and caring for our co-workers, mitigating the environmental impact of our process, bit by bit, and advocating for what we believe in. I’m happy to say that we found that partnership. And you know what? I’m even happier to say that over the life of our ESOP, my co-workers made nearly $250 million dollars. More than any other group of shareholders, including my family, by a fair distance. That’s amazing, and it makes me so happy. At New Belgium, we changed people’s lives. I know that because I’ve had many heartfelt conversations with my co-workers. We built equity together, and we reaped the benefits together. 

That’s a very personal story, and I’m not sure that I’ve ever told it so forthrightly. So why did I tell it today? Because we need some new maps, some people asking who do we want to be and who do we need to be? 

Yvon and Malinda Chouinard, founders and owners of Patagonia—along with their children, chose to make the planet their only shareholder as they thought about their exit strategy. The company transferred their voting stock, 2% of the company’s stock, to a Purpose Trust. All profits not used to invest back in the business, will be distributed as a dividend to Holdfast Collective, an innovative nonprofit dedicated to planetary solutions. This includes funding political candidates whose primary mission is to fight the climate crisis. They estimate $100 million will be transferred into Holdfast each year and Holdfast reports that they will distribute all of that money annually.    

We are in a defining moment.

After my sons and I sold our shares to the company, we started The Mighty Arrow Family Foundation, named after our fearless dog Arrow. 

At Mighty Arrow, we’ve made a pledge to sunset the foundation and disburse all of our funds by 2040, rather than perpetuating a multi-generation giving plan. There is pressing work to be done right now and the planet and its people need resources right now.

Democracy is imperiled. The Brennan Center for Justice reports that as of May 4, 2022, for just that four month and four day period, lawmakers in 27 states proposed at least 148 election interference bills.  This does not mean that these laws passed or even gained serious traction. But just the attempts indicate a willingness to rewrite the rules of democracy. 

When it became clear that voter suppression, focused particularly on communities of color, was going to have a potentially significant impact on the outcome of what was supposed to be a democratic process, our Board of Directors at Mighty Arrow used our rapid deployment process. We reached out to people who knew local community organizers in key states and asked how we could help. We gave money. All within a two-week process. Elections are supposed to be like gaining market share in business. Cheating is not winning, the “product” that offers the “best solution for the customer” wins. 

Have I said that I’m sorry the heavy bits of this speech aren’t very uplifting?

I want to be clear, this situation doesn’t solely rest at the feet of business, and it is not the job of enterprise to solve all of the world’s problems. The problems are big, multi-factored and complicated. But unless, and until, business gets involved in the work of stewarding our planet, there is no way that we’ll proceed at the pace that we’ll need over the next 30 to 40 years. 

Going back to climate change. In March, the IPCC or Intergovernmental Panel on Climate Change, released a report that focused on the urgency of the near term in their summary.  Here’s what they had to say: 

• Climate change is a threat to human well-being and planetary health (very high confidence).

• There is a rapidly closing window of opportunity to secure a livable and sustainable future for all (very high confidence).

• Climate resilient development integrates adaptation and mitigation to advance sustainable development for all, and is enabled by increased international cooperation including improved access to adequate financial resources, particularly for vulnerable regions, sectors and groups, and inclusive governance and coordinated policies (high confidence).

• The choices and actions implemented in this decade will have impacts now and for thousands of years (high confidence).

They also said we have made some progress, especially in policy, so progress is possible, which is good news. They cite citizen engagement as one factor among many in success or failure. 

Things are getting existential. We have a relatively short timeline and an outlook in the interim years that is not very rosy. We will not be extinct in that time, but our quality of life will be significantly compromised in pretty comprehensive ways.   

Kim Stanley Robinson’s futuristic fiction “The Ministry of the Future” is looking, uncomfortably prescient. 

The track record of business, writ large, doesn’t bode well for their willingness to be accountable, and engaged. To solve this looming state of affairs, we’ll need leaders from all sectors to apply their very best committed hearts and minds. We’ll need the legacy companies and the scrappy start ups to truly believe that they have an important role to play in devising new and better models, for not only running businesses, but producing goods and services that benefit the world. And we’ll need people like you and me to think about the impact of our spending and lifestyle choices on the larger scheme of things, to practice small footprint consumerism, and to advocate for the role of government in legislation and policy making.

I don’t know how we’ll achieve these important outcomes without policy that requires business behavior that is in line with achieving targeted levels of reduction. We’ll need to spend on energy infrastructure and dismantle some of our existing legacy practice while we significantly ramp up renewable production, electrification of the transportation sector, and solid planning for the use of bridge fuels in the intervening time period.  

I would be remiss, especially given our milieu, if I didn’t mention the important role of universities in leading through research, teaching and service. At CSU, there’s our very own Bill Ritter and the Center for The New Energy Economy who certainly has a perspective that is deeply informed on innovative policy about the carbon market. And Dr. Bryan Willson at the Energy Institute. They are both great examples of leading the way on policy and connecting research to commerce devising in the field solutions. Dr. Diana Wall, founder of the School of Global and Environmental Sustainability has been at the forefront in the academy by providing a multi-disciplinary approach to the study and practice of environmental sustainability for students and researchers since 2008. And, of course, your very own College of Business has led on both sustainability and global thinking, offering the best in class Impact MBA.  We have an incredible commitment to innovative change in the triple bottom line of business on this campus, which we should all be proud of.

The free market is just that: A construct.

Four or five business generations ago, when the modern global stock market was fully re-formed after World War II, we believed collectively in the primacy of corporate titans. These were people who ran companies and knew how to build wealth, they were the nation’s employers and were revered by our culture. Not too far back in the way-back-machine, there was Jack Welch of GE and Lee Iacocca of Chrysler. Creating wealth and a vibrant country through industry was “job one,” as they say. Let the free market regulate itself, they said. Regulation was an impediment to the free-market model, and was frowned upon as unnecessary meddling by government. “Industry will do a good job of policing itself.” But the roadway is littered with bad actors. Enron, Purdue Pharma, FTX and Norfolk Southern to name a few.

Corporations tell us that they have a fiduciary responsibility to create wealth for their shareholders. And that’s true. But how much wealth is enough wealth?  

Do they get to do so without accounting for their externalities? 

Do they get to pollute our air and our water with no cost except for the fines they pay, which by the way are de minimis to their profitability? 

Do they get to have balance sheets, that investors rely on, that don’t mention their stranded assets? 

Or take advantage of people with their strategies that are financially dubious and filled with wishful thinking? 

Do they get to engage in toxic manufacturing practices, taking advantage of less empowered or disenfranchised communities—often communities color?

These titans evolved the modern notion of the construct called the free market and a host of legislators and regulators passively accepted that notion. But the free market is just that: A construct. It is really the interplay of government, enterprise, financial institutions, including the stock market, and human beings all headquartered here on Planet Earth. Importantly, governments have a very strong role to play in shaping markets. 

Things feel broken, and our reverence for the role of business and building wealth seems to have displaced ethics and commitment to the greater good. The tide is not rising for all boats. 

According to the Economic Policy Institute, in 2021 CEOs at the top 350 publicly traded companies in the US were paid on average 400 times more than their workers. In 1965, it was 20 times. CEO pay has risen by 1,460% since 1978, while workers realized an average of 18%. Currently, the federal minimum wage is $7.50 an hour, where it’s been since 2009—that’s 14 years. At full time, that’s about $15,000 a year. CEO compensation in 2021 averaged $27.8M. And by the way, Elon Musk was removed from this data set because the options he exercised were so big, it would have badly skewed the data. 

This gives business a bad name. And I hate that. I think it’s interesting that CEOs and shareholders are concerned about capital being used to invest in workers or reducing the impact of externalities, but they don’t seem to have as much to say about stratospheric CEO pay. 

One of the ways that businesses can choose new ways of operating is through the adoption of B Corp status. I’m guessing many of you are familiar with this organization, their concept is really quite elegant, although it has not been well or fully tested in public markets. A B Corp election is a “bolt-on” to another corporate designation such as an S Corp, C Corp or LLC. There are two big levers: One is the tri-annual audit - B Lab, their sister organization, makes sure that companies are within the guidelines of the B Corp charter. These things include the ratio of CEO wage to the lowest paid worker and progress made toward carbon neutrality. Worker voice and strong governance also have measurements among other factors. The audit is scored and compared against all members and like-industry members. 

The other thing that B Corp status does is to add language to a company’s by-laws that says that the company shall take into account a variety of stakeholders. This allows for a broader scope of investments in needed environmental best practices without the fiduciary risk of shareholder lawsuits. 

We found B Corp audits really helpful at New Belgium. It clarified where we were succeeding, and where we needed to put more of our time, talent and treasure.

There are more leaders today who find themselves, sometimes surprisingly, in the role of entrepreneur, and then CEO, who lead with values that are not rooted in the rules of business. They are perhaps more progressively or humanistic-ly oriented. They also tend to be closer to the vibe of the organization and its culture. To be sure, there are larger companies who have had commitments to things like resource improvement such as reducing plastics and growing supply chains with more sustainable options. This seems to be especially true in companies with founders still at the helm and in closely held organizations.  But these are often small test “side projects.” There is certainly something to be said for the power of small and/or closely held businesses and their willingness to be nimble with change and even progressive business practices. But if we are going to achieve change on a meaningful scale, we will need the sheer volume of innovation, capital and human power that those 350 largest publicly traded companies possess.  

Companies are sometimes compelled to make better ethical decisions in part because of the risk to brand reputation from doing otherwise. Our ability to know more about good and bad corporate actors has had an interesting effect on behavior that, overall, I think is useful. Everything companies do is brand. The historic level of transparency and access to information which shapes brand perception can be scrutinized and publicly disseminated, for individuals and corporations. We have remarkable levels of insight into companies, and I believe our expectations and transparency have served as a governor on dubious behavior. The growing discipline of shareholder activism has a big role to play as well.

One of the things we can all do, is be more conscious of the companies from whom we buy products and services and with whom we invest. That’s not simple, or necessarily quick, and in some cases it’s not even possible to choose a different vendor—think your local utility—but it’s a place where small steps like a robust environmental, social, and governance (ESG) screen on your (likely future) portfolio can make a difference. 

We can promote loving and caring.

The greatest effect, at least in the short term, of the pandemic was to change our thinking about the relationship between work, workers and institutions of all kinds. The effect this has had on workers’ wages has been a great example of the free market. I want to acknowledge that the other profound reality that became even more concrete was the disparity between lower wage service workers, some deemed essential during the pandemic. Whenever I felt sorry for myself during lockdown in the pandemic, I remembered single moms, working two jobs, and trying to parent.

For one of my co-workers at New Belgium, David, his stepdad was the most significant adult figure in his and his brother’s life. His stepdad was dying of cancer. David was a new manager in one of our departments. He wanted to be able to spend that time with his dad and his brother, but he was concerned about showing that he was up to his new management role. People are making these kinds of trade-offs and worse in their work lives, every day. I am all for busting ass at work—and I think it’s really important to honor the whole of a person’s work and personal life. People call that work-life balance, which I think is a misnomer. When I’m working, especially when it’s intellectually and emotionally compelling work, I want to do that with as much verve and gusto as I can manage, balance be damned. And when I need to take care of something in my life, I want to be able to do that freely as well. David took off three weeks to be where he needed to be. His brother? He got fired from his job for taking that time. I used to cry when I told that story. 

The number of people who have told me that working with us at New Belgium, was the first time in their lives where they felt like they could be themselves at work, blows my mind. This one mystifies me, because it doesn’t cost leaders anything to create a loving and accepting vibe at work. Did I have expectations? Yes. People need to be committed, on their toes, and skillful and productive in their area of expertise, and it helps if they’re easy to be with too. If they work with customers, they need to be warm, welcoming, fun and hospitality-industry tidy. I do not care if they have tattoos, or gauged ears, or about their sexual orientation. I want them to feel like they belong with us. I want them to feel like we love them for who they are—and that we have their backs.  

Early on, I mentioned acknowledging our interconnectedness and pointed to inequity and stress for humans. We can promote loving and caring; we can decide that making people “other” and judging them isn’t who we want to be. We can have a light touch and make more seats at the table of humanity. There will be places where this will be difficult, like conversations and action around reparations. But for each of us, as one person with the ability to act, we can approach with care. 

You will come to crossroads of your own, and that will require choices on your part. With whom will you align your talent? Is that congruent with who you want to be? Are you using your head and your heart to do important and meaningful work that is congruent with who you need to be? 

You will not be flawless. We are all flawed. And we get do-overs. We get to make new choices and draw new maps. I’ll end by saying that I’m excited and anxious for our collective future, and I have a lot of faith in you.

Thanks so much!