Changing for good:
Building an ethical consulting practice
Right Lane was established in 2008 to help private, not-for-profit, and public sector clients to accelerate their strategies and plans.
The firm grew quickly, leaning towards working with organisations we wanted to help because they were doing something positive for society, particularly those fostering inclusive growth, social justice, sustainability and public health.
In 2011, we decided to formalise it.
An inspiring Harvard Business Review article, ‘The For-Benefit Enterprise’, by Heerad Sabeti (2011), described the transformative potential of an emerging fourth sector of the economy, comprising organisations that were commercial and community oriented, being neither strictly for profit nor not-for-profit.
Right Lane, led by Marc Levy, had instinctively adopted many of the values and principles of the for benefit enterprise described in the article. But it also presented the challenge of more sharply defining Right Lane’s intentions. We were interested in building a firm that was profitable but not greedy; we wanted to build long-term partnerships and foster genuine collaboration with clients, helping them get to the best possible answers themselves and then assisting them to implement.
In 2012, Right Lane adopted a set of principles underpinning our commitments to the for-benefit enterprise and to building an ethical consulting firm helping organisations that do good do better.
These principles centred on:
Serving clients low on resources
The combination of reasonable returns to shareholders, competitive fees and manageable hours for our people but with high expectations regarding productivity and efficient engagement management, meant we could serve more of the clients whose missions inspired us.
Transparency and inclusive ownership
We began sharing all performance data and launched an employee share ownership scheme.
External insight and oversight
We built up our Professional Network of top consulting talent and appointed an advisory group to test and challenge our thinking.
Societal and environmental responsibility
When possible, we preferenced nonprofit and social enterprise providers and offset our environmental impacts, and (later) we became one of only 500 service provider signatories of the UN-supported Principles for Responsible Investment globally.
Formalising intent: Australia’s first B Corp certified strategy consulting firm
In 2015, Right Lane became Australia’s first B Corp certified strategy consulting firm, and the first to be recertified in 2017 and again in 2021.
B Corp Certification is verification that a business is meeting high standards of social and environmental performance, accountability, and transparency, from factors like employee benefits and charitable giving to supply chain practices and input materials. In order to achieve certification, a company must:
- Demonstrate high performance by achieving a B Impact Assessment score of 80 or above and passing our risk review.
- Make a legal commitment by changing their corporate governance structure to be accountable to all stakeholders, not just shareholders.
- Exhibit transparency by allowing information about their performance measured against B Lab’s standards to be publicly available on their B Corp profile on B Lab’s website.
On 11 December 2019, Right Lane was one of over 500 B Corps, including 44 from Australia to publicly commit to reaching ‘Net Zero by 2030’ the UN Climate Change Conference (COP25) in Madrid.
In becoming a B Corp, Right Lane committed to:
- New problem solving
B Corps are a new kind of company that use the power of business to solve social and environmental problems.
- Higher standards
Meet higher standards of social and environmental performance, transparency, and accountability.
- Reduce emissions
500+ B Corps (including Right Lane) publicly pledged to reduce their greenhouse gas emissions to achieve net-zero by 2030 (or earlier).
Introducing the Right Lane Foundation
In July 2022, Right Lane restructured into a foundation owned company, becoming the first privately owned Australian management consulting firm, and possibly the first for-profit company in Australia, to do so.
Right Lane Consulting is now 55 per cent owned by the Right Lane Foundation, a not-for-profit charitable purpose Australian public company registered with both the Australian Charities and Not-for-profits Commission and the ATO, with its own board operating independently of Right Lane Consulting. The remaining 45 per cent of Right Lane has been retained by Right Lane staff.
A number of key staff in Right Lane sold down their shares in the firm to the Foundation, which will use dividends earned from Right Lane Consulting over the next few years to pay for its majority ownership shareholding in Right Lane Consulting.
Once the Foundation has paid for those shares using the dividend stream it is acquiring (est. ~4-5 years), the Foundation will invest most or all the dividends it earns from its for-profit subsidiary Right Lane Consulting to provide charitable organisations low on resources with access quality consulting support they couldn’t otherwise afford.
After that, the Foundation will invest dividends which it receives from its shareholding in Right Lane Consulting into supporting charitable organisations and their projects across a range of sectors including health, education, social welfare, human rights, environment and public benevolent institutions.
The decision to change the structure of Right Lane and to appoint a new CEO, Chiara Lawry, was driven by Right Lane’s founder Marc Levy, to foster sustainability and demonstrate renewal for the firm.
Foundation ownership structures are popular overseas, particularly in Northern Europe, and are used by some of the largest and most successful corporate organisations in the world, including Ikea, Zeiss, Robert Bosch and Rolex.