Md. Adopts Nation’s First Law Creating Do-Gooder ‘Benefit Corporations’
Maryland’s governor signed legislation this week creating a new kind of corporation that seeks to make a profit at the same time it performs social good.
The measure is the nation’s first “benefit corporation” law, according to stories in Business Week and the Philadelphia Inquirer. It allows directors of such corporations to make decisions that consider employees, the community and the environment in addition to shareholder value.
William Clark Jr., a corporate lawyer at Drinker, Biddle & Reath, drafted the legislation. He told the Inquirer that at least seven states are considering similar measures. Among them, Vermont is closest to enacting a bill.
Ice cream entrepreneurs Ben Cohen and Jerry Greenfield are backing the Vermont bill, the Associated Press reports. If Ben & Jerry’s had been incorporated as a benefit corporation, they say, they may have had legal cover to rebuff a buyout offer by the European conglomerate Unilever.
If the company had been a benefit corporation, AP says, the “hippie capitalists known for creating quirky flavors like Cherry Garcia and Chunky Monkey would have been better situated legally to rebuff Unilever’s offer and continue their tradition of holding a free folk-rock festival to coincide with their annual meeting,” the AP story says.
Prior coverage:
New York Times: “Businesses Try to Make Money and Save the World”
