B Corp – What is a Beneficial Company?
While so many US companies and financial institutions are run by people focused on breath-taking salaries and benefits for themselves, Vermont comes to the rescue by proposing legislation that blends good business and social benefit. The below guidelines are lifted from the Burlington Free Press. We hope the BFP and Vermonters won’t mind our spreading the news and highlighting credit where it is due.
The Queen of Amerindia
From the Burlington Free Press:
Legislation has been introduced in Montpelier that would allow companies to exist for other reasons — providing a social good for the community while returning gains to investors. Such companies would register as a “beneficial corporation.”
Vermont would be the first state to enact such legislation, although similar measures are being considered in several states.
What makes a company a B Corp.
The bill pending in the Vermont Legislature to establish so-called beneficial corporations provides several specific examples of such a benefit:
• Providing low-income or underserved individuals or communities with beneficial products or services.
• Promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business.
• Preserving the environment; improving human health; promoting the arts, sciences or advancement of knowledge.
• Increasing the flow of capital to entities with a public benefit purpose.
The measure requires companies make an annual report, detailing their community benefits. A third party rating agency, possibly B Lab, will score the impact of the company’s efforts and those scores will be public. Companies, however, will not be disqualified from being a benefit corporation if they fail to meet goals.