On Tuesday, Eric Henry visited our state legislature to lobby for the creation of a new corporate form – the Benefit Corporation. Benefit Corporations are a new class of corporation that meet higher standards of performance, accountability and transparency.
This new corporate form is the brainchild of our friends over at B Lab, creators of the B Impact Rating System, a survey and audit system that helps socially- and environmentally-responsible businesses validate their efforts.
One of the many reasons the Benefit Corporation legislation is so important: to protect businesses whose goal is to consider all stakeholders. From the B Corp 2011 Annual report:
In 2004, Craigslist sold 28.4 percent of the company to eBay. Three years later, eBay filed a lawsuit to stop Craigslist from implementing a policy to prevent the online shopping site from acquiring founder Craig Newmark’s remaining shares when he dies and potentially overriding Craigslist’s community-minded mission.
Last year, on Sept. 9, a Delaware judge ruled in eBay’s favor, stating that stockholder wealth maximization is the only end game for Delaware corporations. In the decision, he wrote: “Directors of a for-profit Delaware corporation cannot deploy a [policy] to defend a business strategy that openly eschews stockholder wealth maximization – at least not consistent with the directors’ fiduciary duties under Delaware law.”
As a business whose basic mission is to look after People, the Planet and Profit equally, this corporate form is essential to ensure that the evolution of TS Designs will always remain focused on this triple-bottom-line philosophy.
Similar forms of this legislation have already passed in Maryland and Vermont, and are well on their way in New Jersey, Colorado, Hawaii, New York, Pennsylvania, Virginia, California, and Michigan.
To read more about the Benefit Corporation legislation, check out B Lab’s webpage on the topic. If you want to help keep NC ahead of the curve on this crucial piece of policy, please contact your NC Congressperson and urge them to support this bill!