Daily Harvest

All Things Green and Business in my life

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New Law Allows Businesses to Incorporate as “Benefit Corporations”

I recently stumbled across this article and thought that it was worth sharing with the readers of this blog.  The WSJ reported on a new law that has been passed in several states.  This law will allow businesses to incorporate as “benefit corporations”. A charter of this nature will essentially allow a board to account for social and environmental goals, as well as profits and shareholder value.  Are you wondering why shareholders should care about this?  Consider this: Outdoor-apparel company, and environmental activists Patagonia posted roughly $500 million dollars in revenue last year.  Pretty amazing when you consider that they really buck the trend of traditional corporate cultures.  You can read the entire article below: http://online.wsj.com/article/SB10001424052970203735304577168591470161630.html

One of most interesting aspects of this, is the potential impact it will have on the Nexus of Contracts.  If you are unfamiliar with this term, Let me direct you to a little knowledge I picked up when I got my MBA.

 My finance professor Dr. Jim Mahar posted this for the class.  Very interesting and very important! http://www.youtube.com/watch?v=HT4LJ7UeAi8 

It should be interesting to see how this plays out in the future.  The concept of sustainability, social entrepreneurship, transparency, and the very active roles customers now play in operations could encourage new entities to consider this type of incorporation.     

Filed under Benefit Corporation Social Responsibility Environmental Corporation Investing Patagonia Ben and Jerry's Wall Street Journal Dr. Jim Mahar News Nexus of Contracts

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