By Dave Hendrick
King Arthur Flour enjoys cult-like devotion from serious bakers, who are willing to pay a premium for a product whose high protein content and tight quality specifications are valued for superior cakes, cookies and bread.
And while the company’s products are beloved, it’s the structure of the enterprise behind the flour and baking ingredients that made Co-CEO and CFO Ralph Carlton a featured speaker at the recently concluded Net Impact Week — a week of speakers and events focused on social impact sponsored by the University of Virginia Darden School of Business’ student-run Net Impact club.
King Arthur Flour Co-CEO Ralph Carlton
Carlton, a former Goldman Sachs and Coca-Cola Co. executive who now serves as one of three CEOs of the 227-year-old Vermont-based company, described his experience leading a B Corp — a for-profit company that balances profits and purpose in a verified manner, meeting certain standards of social, environmental and ethical corporate action.
Other well-known B Corps include Patagonia, Warby Parker and Ben & Jerry’s, among others.
“As a B Corp, we worry about our shareholders, we worry about our employees, we worry about the community and worry about our environment,” Carlton said. “And we do it as part of our DNA. It’s essential to who we are in every decision we make.”
Environmental, social and employee welfare considerations do not come after the financial considerations are made, Carlton said. Rather, they are given equal footing in all decisions and play a central role in the company’s strategic planning.
The Darden School is fertile Ground for such considerations. In addition to a thriving Net Impact club, the School is home to leading scholars and teachers of stakeholder theory, and was recently named the No. 1 MBA program in the world for Corporate Social Responsibility in the Financial Times’ Global MBA ranking 2019.
Carlton described the B Corp movement as in its early stages, with opportunity to expand beyond non-public companies and to continue to grow recognition of the B Corp brand. Still, Carlton said B Corps and their ilk have rising currency among young people, who he said are increasingly interested in who they are buying from, not just what they are buying.
The B Corp designation is just one atypical aspect of the King Arthur story, however. The company is entirely employee owned, for one, and has not one but three CEOs.
Insisting “three heads are better than one,” Carlton said the unusual leadership decision came about after the previous CEO stepped down and recommended shared leadership. Believing that a complementary set of skills existed within the company and reluctant to go outside the company for a new leader, the company’s board opted to elevate originally four, now three existing leaders to the top role.
Carlton said a critical element for the success of the unusual arrangement was that none of the three leaders nursed the ambition to be the sole CEO. He lauded the ability to hash out the thorniest problems with a team of equals.
“The dynamics are great,” Carlton said. “But we understand that it isn’t right for most companies.”
The King Arthur Flour talk capped a busy Net Impact Week, a week sponsored by Darden’s Net Impact club that included a special First Coffee, speakers such as McDonald’s former Vice President of Corporate Social Responsibility Bob Langert, and panels devoted to clean energy and young alumni working in purpose-driven organizations, among other activities.
About the University of Virginia Darden School of Business
The University of Virginia Darden School of Business delivers the world’s best business education experience to prepare entrepreneurial, global and responsible leaders through its MBA, Ph.D. and Executive Education programs. Darden’s top-ranked faculty is renowned for teaching excellence and advances practical business knowledge through research. Darden was established in 1955 at the University of Virginia, a top public university founded by Thomas Jefferson in 1819 in Charlottesville, Virginia.
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