Philadelphia partner Bill Clark and associate Lizzie Babson authored an article for the William Mitchell Law Review titled, “How Benefit Corporations are Redefining the Purpose Of Business Corporations.”
Bill was responsible for drafting all the benefit corporation legislation that has been enacted or introduced as of the publication of the article and he and Lizzie worked tirelessly in 2011 to get legislation passed throughout the United States.
The legislation creates a new type of business corporation in which the board is required to consider social and environment objectives in addition to profits, and is shielded from investor lawsuits.
In their article, they discuss the concept, the legislation, the market demand, and existing corporation law.
They emphasize that “Benefit corporation legislation differs from other attempts to “green” the corporate code.”
Rather than “trying to fit mission-driven companies into the traditional corporate framework based on shareholder primacy,” they say, “benefit corporation legislation tweaks a familiar corporate form to address, in a meaningful way, the specific demands of shareholders and investors who desire transparency and accountability with respect to these businesses.”
See the PDF button below to view the entire article.