Why we reorganized as a Public Benefit Corporation
We believe that companies can be both profitable and purposeful. This belief is at the core of Sustainment’s decision to incorporate as a Public Benefit Corporation, which serves the purpose of cementing our mission to help American manufacturers into our corporate governance structure. We view manufacturing as a central part of the American identity, and we are convinced that enabling domestic supply chains benefits our country.
As summarized by the Harvard Law School Forum on Corporate Governance, “a ‘public benefit corporation’ is a for-profit corporation that is intended to produce a public benefit and to operate in a responsible and sustainable manner.” Importantly, it provides a legal framework that requires the board to balance financial interests and the non-financial interests that support our stakeholders.
Sustainment’s benefit statement, which is part of our corporate governance, reads as follows:
“The specific public benefit purpose of the corporation is to create a domestic manufacturing community with a positive effect on, primarily, small-medium manufacturers and the employees, communities, government, and industry organizations that support or rely on them.”
To summarize, we exist to help the small and medium-sized manufacturers (SMMs) that form the backbone of the US manufacturing economy. By helping SMMs, we enable job growth and economic development at the community level, while concurrently helping larger companies’ onshore manufacturing and supporting national security objectives related to strengthening the defense industrial base.
The US manufacturing industry has evolved in such a fashion that most of the business models for companies that support and enable manufacturers are optimized for large original equipment manufacturers (OEMs) and other constituents, often at the expense of American SMM suppliers. Among these models are database companies that charge SMMs to be listed and/or prioritized in search rankings, RFP aggregation services that charge SMMs for access to RFP feeds, offshoring services that pit US manufacturers against lower-cost international competitors, and next-generation factories that seek to build new manufacturing capacity that removes the need for existing SMM suppliers.
My point is not to disparage those businesses, as there are solid companies in this industry whom we respect very much. Rather, I seek to acknowledge the reality that most of industry has made the business decision to optimize for larger organizations. While we understand this decision, we built Sustainment to be different and uniquely supportive of our SMM customers.
At the same time, we understand that there are economic incentives that have driven our colleagues to optimize for larger market participants. For this reason, we wanted to formalize our commitment to SMMs in our corporate governance by becoming a PBC to ensure that we always remain committed to our mission of helping American SMMs thrive.
As a result of this decision and our SMM-focused business model, we are fortunate to be surrounded by an ecosystem of like-minded partners who are also working to support American manufacturers. These partners include local industry groups like the Austin Regional Manufacturers Association, community groups like the Corpus Christi Regional Economic Development Corporation, state organizations like the Texas Manufacturing Assistance Center (TMAC), research organizations like Ohio State University, and national groups like the National Institute for Metalworking Skills.
These partners represent a microcosm of what is happening at the national level. There are manufacturing support organizations like these throughout the country that are aligned towards the mission of economic development and growing US manufacturing. As 98.9% of American manufacturers employ less than 500 employees, growing the US manufacturing industrial base means growing and enabling American SMMs.
In alignment with our purpose as a Public Benefit Corporation, we have made several key business commitments:
All these areas of commitment are predicated on the core value that US manufacturers are the backbone of our identity as a nation. These companies just need to be discovered to show what they can do. As my cofounder Michael Morford elegantly summarized,
“We built this business to help people. As veterans who grew up in small towns, we have a great respect for men and women who build. Our goal is to create tools and opportunities for American manufacturers.”
We believe that companies can be both profitable and purposeful. This belief is at the core of Sustainment’s decision to incorporate as a Public...
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