"New York Rolls Out New Kind of Corporation"

[RKP5637]

http://www.care2.com/care2blog/new-york-rolls-out-new-kind-of-corporation.html

"New York, NY: New York Secretary of State Cesar A. Perales was on hand to accept filing papers from New York’s first benefit corporations, a new kind of corporation that became available in New York for the first time today. Created when Governor Cuomo signed S.79-A (Squadron)/ A.4692-A (Silver), the benefit corporation passed both houses unanimously.

This new law has the ability to transform the State and national economy by creating businesses that must create benefit for society and the environment in addition to profit. Thirteen businesses from across the State rushed to adopt the new corporate form as they build a new economy. One company even left Delaware and incorporated in New York State to take advantage of this innovative corporate form. Currently seven states, including New York, have enacted benefit corporation laws.

...

Benefit corporations are a new kind of corporation legally required to: 1) have a corporate purpose to create a material positive impact on society and the environment; 2) expand fiduciary duty to require consideration of the interests of workers, community and the environment; and 3) publicly report annually on its overall social and environmental performance using a comprehensive, credible, independent, and transparent third party standard. Traditional corporate law requires corporations to prioritize the financial interests of shareholders over the interests of workers, communities, and the environment."

[xchrom]

1. Du rec. Nt

[Laelth]

2. This is a good idea.

Once upon a time, all corporate entities were "allowed" to exist only because it was believed that they would provide some benefit to the state and to the people. Over time, we lost this criteria. It's nice to see attempts to restore it and to ensure that corps. serve the public good and not just the interests of shareholders.

-Laelth

[rfranklin]

3. Our founding fathers were very wary of corporations, having experience the East India Trading Co...

After the nation’s founding, corporations were granted charters by the state as they are today. Unlike today, however, corporations were only permitted to exist 20 or 30 years and could only deal in one commodity, could not hold stock in other companies, and their property holdings were limited to what they needed to accomplish their business goals. And perhaps the most important facet of all this is that most states in the early days of the nation had laws on the books that made any political contribution by corporations a criminal offense...

....Thomas Jefferson also said this in 1816,

“I hope that we shall crush in its birth the aristocracy of our monied corporations, which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country.”


http://www.addictinginfo.org/2011/11/13/what-the-founding-fathers-thought-about-corporations/

[RKP5637]

8. K&R!!! This link was interesting! Thanks for posting!!!

[rfranklin]

9. My pleasure...nt

nt

[Zalatix]

17. WOAH!!! Please make a thread based on this so I can rec it!

[davidpdx]

4. Wow, thanks for posting this

I'm working on my DBA and hadn't heard about the new law. It's a step in the right direction for corporate governance.

[think]

5. K&R Benefit Corps ARE the future of capitalism.

That is unless Wall Street banksters find a way to sabotage it.

A double bottom line is an intelligent approach to breaching the excesses of corporate malfeasance in America. After years of unbridled greed that has interrupted the American dream, it's time to restore social value to the concept of the modern corporate structure.

[RKP5637]

7. Exactly and well said. I think many individuals would prefer to

work for a 'Benefit Corp.' than some seedy greedy corrupt corporation. The latter might eventually do themselves in by people eventually telling them to F off and not using their products, services or working for them.

The 'Benefit Corps.' IMO have the potential to work within the existing system and improve the system. We have a system that works, but the greed and corruption needs to be eradicated.

[RKP5637]

6. K&R'ing for more visibility. n/t

[jsmirman]

10. K&R *

nm

[LadyHawkAZ]

11. I'll be interested in seeing how this goes

rec.

[oldhippie]

12. Me too .....

.... I'd like to see it work, but I suspect it is doomed to failure. Kinda like the mutual fund I used to have years ago that only invested in "socially responsible" companies. They and it went bust.

The problem with the dual bottom line is that the "benefit" line is going to be highly subjecctive. Even here on DU we have all kinds of different ideas of what constitutes desirable social outcomes when it gets down to the details. The one big advantage of a $ denominated bottom line is that it is esaier to objectively measure.

I'm glad that they are trying it, though. Hope it works.

[annabanana]

13. K&R&tweeted&faced.,. . . . n/t

[RKP5637]

14. Thanks!!! n/t

[ohheckyeah]

15. Tell the truth...

this is from the Onion, right?

[RKP5637]

16. No, no, no ... sure seems like though, doesn't it ...

[ohheckyeah]

18. Yeah, it really does.

I'm stunned.

[snot]

19. Extremely interesting. A couple of comments:

To my mind, part of the problem with corporations may be structural – i.e., it's not just a matter of re-defining their mission to include benefit to their employees and society, but of changing the rules governing the processes of corporate decision-making and governance.

Has the structure of these new corporations been changed in such a way that senior executives no longer have any incentive to run the corporations for their own personal benefit?

How will the new rules be enforced? Will corporations be subject to some kind of equivalent to the FOIA? Who will regulate, inspect, enforce them, and are the appropriate agencies fully funded? What will the penalties for noncompliance be, and how will they be collected?

Will there be any greater potential for holding senior executives personally liable?

Etc.