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B-Corporations and the Rise of Social Entrepreneurship

 

A few months back I sat on a panel to discuss Non-Profit Sustainability and Social Entrepreneurship. You can check out the video here.

I was asked to provide some comments on B Corps – or Benefit Corporations.

To cover some basics –

B-Corps have a dual purpose –

  1. To create profit and
  2. “create a material positive impact on society and the environment”

B-Corps also impose heightened fiduciary duties on board of directors, require the Board to consider social/environmental consequences for board decisions.

These “heightened fiduciary duties”  is contrasted with the setting of the traditional corporation – where the shareholders appoint the board of directors who make decisions  to maximize profits to the shareholders.

 

History of B-Corps:

Maryland was the first state to enact B Corp legislation in 2010.

In 2012 – there were 7 states with B Corp legislation enacted.

Today: 31 states (and counting) with B Corp legislation enacted.

Michigan is still not one of those states.

To me, this increase in number of B Corp states acknowledges that millennials and others joining the work force today want to be part of business that does social good.

A question that Michigan legislators must be wrestling with – do we join the trend? Or could allowing for B-Corp formation/conversion, cause a detriment to existing business?

If there is data on that point, I haven’t seen it.

 

Questions? Comments?

e-mail: Jeshua@dwlawpc.com

http://www.dwlawpc.com

Twitter: @JeshuaTLauka

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