6 Reasons To Morph Into A “Benefit” Corporation

Patagonia- California's first Benefit Corp (Andrew Hyde/ CC BY 2.0)

Ever heard the words “fiduciary duty”? I hadn’t either, till I looked up Corporate Law for Dummies. Here is what caught my attention, “Unless modified by statute, traditional fiduciary duties require corporate officials to
further the interests of shareholders, and thus require them to maximize corporate profits subject to the obligation to comply with independent legal constraints”. Translating into English, it simply means it is the legal responsibility of a corporate to maximize profits and protect the interests of its shareholders. On the flip side, it is not within the scope of the “fiduciary duties” of a corporate to consider the interests of other stakeholders, including, employees, suppliers, communities and the environment. If they do, a corporate can set itself up for some expensive lawsuits by profit-hungry stakeholders. Craigslist found out the hard way. Ben and Jerry’s, that role model do-good business, lost a lot of its glory in the Unilever buyout and the founders still think it cuts deep. Continue reading