A Benefit Corporation is a new corporate entity offering entrepreneurs and investors the option to build and invest in businesses that meet higher standards of corporate purpose, accountability and transparency.
NY Assembly will vote later this week on whether to pass this new entity. PLEASE SIGN THE PETITION NOW TO SHOW YOUR SUPPORT OF THIS BILL.
In a traditional corporation, fiduciary duty focuses on increasing shareholder profits. In the case of Benefit Corporations, fiduciary duty is redefined by stating that the creation of public benefit is in the best interests of the Benefit Corporation. This allows corporate officers to define other goals beyond just making a profit and then gives investors the power to require those officers to make decisions that reflect those goals, even when they lower profitability.
We I formed Eco Brooklyn I thought long and hard whether it should be a non-profit or a for profit and it was a real challenge because it had strong elements of both. I ended up choosing for profit but it is still run with strong not for profit ideals. This is not to say it doesn’t make money, it is just that money is not the ONLY driving force behind it.
Eco Brooklyn is your classic Benefit Corporation. One one hand it is a for profit entity striving to maximize return on investment. On the other hand it is deeply committed to improving the lives of others and the ecology of the planet. So for example it turns down clients who would not allow Eco Brooklyn to fulfill those goals.
This may seem like a stupid move financially but it turns out our selectivity allows us to work only with clients who fit our goals perfectly, resulting in a harmonious process that produces happy clients. Of course this is good for business.
We are recognized for being good green builders because our clients allow us to build green to the fullest. There is no compromise, no conflict between client and firm in terms of values, no value engineering. Just good old green building like it should be done. And when green building is done right it is powerful. It isn’t some add on or afterthought. It embodies the whole brownstone and works as a whole.
This success is largely because we run the company as a Benefit Corporation. We really need this law to be passed so our actions can be legally recognized.
We aren’t a Not For Profit Corporation nor are we a For Profit Corporation, which in its very duality is solely based around profit, either for or against. A Benefit Corporation leaves the whole duality of profit or not and strives to add benefit to the world. Now that is something I can work for.