BSR Insight | Benefit Corporation Model Likely to Grow in 2011
Rethinking corporate law was on the agenda at last week's GreenBiz State of Green Business Forum in Washington, D.C. Jay Coen Gilbert, co-founder of B Lab—a nonprofit organization that promotes and certifies benefit corporations—presented on the need for a corporate framework that supports the creation of both shareholder and societal value.
The benefit corporation is a new corporate form that requires that the company creates benefits for society as well as shareholders. By law, benefit corporations must make a material positive impact on society and publicly report their social and environmental performance using established third-party standards. In 2010, Maryland and Vermont became the first U.S. states to pass benefit corporation legislation, and similar bills are pending in several other states. Gilbert believes that current U.S. corporate law can work against companies that consider environmental and social impacts in addition to shareholder value when the two are not aligned.
"It's time to shift our focus from product standards to a company-level standard—to think beyond green products to good companies. … Just as LLCs (limited liability corporations) were new 20 years ago, benefit corporations are new today. [With approximately 400 certified B corporations in existence today], there’s reason to believe benefit corporations could take off and be the LLC of the future."
—Jay Coen Gilbert, co-founder, B Lab (February 16, 2011)
Share Your Thoughts
Please note, all comments are subject to moderation.