The press release also states that "Maryland is the first state to pass Benefit Corporation legislation, but others are quickly following Maryland’s lead. Vermont Bill S.263, co-sponsored by Senators Hinda Miller and Peter Shumlin, has already passed the Senate and will be considered by the Vermont Assembly over the next 30 days. Other states considering the legislation include Colorado, New York, North Carolina, Oregon, Pennsylvania, and Washington"
An interesting development for sure, though time will tell whether it has much material impact. Still, any initiative that seeks to get deep into the DNA of companies like this certainly qualifies as an exciting and ambitious experiment aimed at genuinely doing something different. The press release from B Lab puts it this way:
Critics will for sure be concerned that this represents a weakening of the economic incentive at the heart of capitalism ... and one that may compromise economic value creation. But surely the time is ripe for efforts like this to balance value creation for all in a systematic way. So congrats to B Lab for getting this going. The road ahead will be long, but this could be an important bridge that has just been crossed."The new law addresses a long time concern among entrepreneurs who need to raise growth capital but fear losing control of the social or environmental mission of their business. These entrepreneurs and other shareholders of Benefit Corporations now have additional rights to hold directors accountable for failure to create a material positive impact on society or to consider the impact of decisions on employees, community, and the environment. From a company’s point of view, the new law empowers directors of Benefit Corporations to consider employees, community and the environment in addition to shareholder value when they make operating and liquidity decisions. And, it offers them legal protection for those considerations."