Benefit
corporations, as recognized in the laws of a few states, aim to benefit society
and the environment in addition to their shareholders. A slight variation on
the model is the B Corporation,
created through a private certification process that requires companies to
declare a social purpose in their governing documents to meet independent
standards of social and environmental performance.
In 2010,
Maryland became the first state to pass benefit corporation legislation,
formalizing this new option in law. Other states soon followed, including
Vermont, New Jersey, New York, Virginia, Hawaii, and California, with many
others expressing interest. Within two years, some 500 companies signed up to
be B Corporations, including a few fairly substantial companies, like Seventh
Generation.
Upstream
21
Upsteam
21, an Oregan holding company that buys and holds small, local companies
committed to sustainability. Upsteam 21 adpoted articles of incorporation that
say the “best interests” of the company embrace not only shareholder interests
but also those of the environment, customers, suppliers, and local communities.
The firm also changed voting rights, so that those with a living stake in the
firm – such as employees and initial direct investors – have more voting power
that those who might purchase company stock secondhand. Voting rights diminish
when they pass from direct investors to investors in the secondary market.
…The
benefit corporation movement is without doubt a huge step in the right
direction. It represents a vital codification of an emerging new sensibility.
The B Corporation certification builds consumer awareness, brands responsible
companies, and creates a potential learning community of companies. As society
becomes more familiar with the concept of benefit corporations, the concept
could also help create the cultural awareness that will facilitate further
systemic reforms. The benefit corporation model is vitally important.
Kelly,
Marjorie. (2012) Owning Our Future: the emerging ownership revolution.
Williston, VT: Berrett-Koehler Publishers.
