When most people think of corporations today, they think of companies which are designed to make a profit.  This is usually the largest profit possible while still using legitimate business methods and not jeopardizing the health, safety, and well-being of the employees.  This is the traditional view of a corporation; however, with the introduction of benefit corporations, this idea is beginning to change.

In the traditional corporation, the president or CEO could not decide on his or her own to raise employee wages or donate to a non-profit organization without running the risk of a lawsuit by shareholders who would claim a reduction in stock value due to lost profits.  Benefit Corporations allow more of a margin for giving in this format.  The corporation still must turn a profit; however, the whole idea of the benefit corporation is to give back, to consider the impact of its decisions on the community, employees, society, and the environment.  In fact, the corporation is legally obligated to create “a material, positive impact on society and the environment.”

"Benefit corporations mark a novel approach to rewriting the contract between free enterprise and society; they have already gained wide support among the progressive business community and social entrepreneurs, as well as state legislators from both parties. But as they spread across the United States, they also raise important questions about the right balance between profit and responsibility. How far can you dilute the profit motive without hurting a business’s chances to grow and thrive? And, if there really is broad agreement that the profit motive sometimes needs to be reined in for the greater good, is a voluntary, opt-in effort really the best tool to accomplish it?" - excerpt from Virtue Inc. Can the new “benefit corporation” charters give companies a conscience?

It’s true that these questions do exist in regard to benefit corporations and will continue to exist for some time.  We can look at the corporations that have already adopted this structure to see how they are providing a hands-on answer to these questions.  As society continues to rethink corporation structure, benefit corporations have had the most success thus far and the prospects continue to look bright for this new form of corporation that merges making a profit with contributing to society and the environment.

Know of great benefit corporations? Let us know!