Louisiana and South Carolina are the latest states to pass Benefit Corporation Legislation. With the addition of these states, a total of 9 states have now passed this legislation (California, Hawaii, Maryland, New Jersey, New York, Vermont and Virginia – five other states and Washington D.C. have introduced the legislation), thus beginning the shift of balance from shareholder priority to community and social awareness. Benefit Corporations or B-Corps, must create positive impacts on society and the environment while meeting higher standards of accountability and transparency. Since B-Corp companies must take actions that create “general public benefits” as opposed to a single, one time benefit, consumers are protected from green-washing claims.
Whereas, most businesses prioritize shareholders, B-Corp businesses take into account workers, community and the environment. It can be increasingly difficult for directors of profit driven companies to follow a social mission over one that maximizes profit. Directors may wish to do right socially, but face repercussions from shareholders who have an interest in profits only. The B-Corp Legislation protects directors from some liabilities, but still retain rights of shareholders. In short, “Benefit corporations best meet the needs of entrepreneurs, investors, consumers and policy makers interested in using the power of business to solve social and environmental problems. Benefit corporations offer clear market differentiation, broad legal protection to directors and officers, expanded shareholder rights and greater access to capital than other new corporate forms (source http://www.benefitcorp.net).”
To learn more or to become a Benefit Corporation please visit www.benefitcorp.net