Last week Delaware enacted legislation to allow businesses to register as benefit corporations. The bill’s passage this past April made Delaware the 19th state in the Union to such a law. Benefit corporation (or B Corp) legislation is particularly significant in Delaware since, due to its lenient corporate laws, almost half the countries in the nation incorporate there.
B corp status, while a relatively new phenomenon, is gaining traction as a new way to promote social conscientiousness in the corporate world. At its core, B Corp status signifies that a company is committed to social and or environmental goals alongside its financial targets. At present, over 700 companies worldwide have sought it as a way to emphasize people and planet alongside profit—a trio that has become known as triple bottom line. These B Corp companies are accountable to third party environmental and social performance standards, and are responsible for producing a biannual report on their results.
The passage of such legislation in Delaware is something of a tipping point. Almost 50% of all publicly traded companies form in Delaware to take advantage of lenient tax and corporate code; 64% of Fortune 500 companies incorporate there. Now not only can new companies consider becoming a benefit corporation, but thousands of established business have the opportunity to retroactively bring a social mission to their corporate charter.
Here at Launcht, we have been active proponents of B Corp legislation for the past few years. We were one of the first to incorporate when Vermont made the option available in July 2011. This has given us a unified identity and mission with our clients, all of whom are hoping to use the crowd to solve a problem.
As B Corp legislation becomes more prolific, it is becoming increasingly clear that values matter in the corporate world. Some have heralded this new legislation as a “seismic shift” in the business world. This is a bold statement, but at the very least it is heartening to see that a more holistic idea of business success is finding support with legislators and business leaders.
To learn more about Launcht and our corporate ideals, please visit www.launcht.com/mission.