Benefit corporation New York & Delaware
Post on 23-Aug-2014
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benefit corporation
@kylewestaway
corporate evolution
BROADENS THE PURPOSE OF THE CORPORATION
increaseS transparency / accountability
a new class of corporation
PASSED IN 21 STATES + DC
INTRODUCED IN 17 STATES
RAPID ADOPTION
PURPOSE
A MATERIAL POSITIVE IMPACT ON SOCIETY AND THE ENVIRONMENT, TAKEN AS A WHOLE, ASSESSED AGAINST A 3RD PARTY STANDARD, FROM THE BUSINESS AND OPERATIONS OF A BENEFIT CORPORATION.
NY general public benefit
PROVIDING INDIVIDUALS / COMMUNITIES WITH BENEFICIAL PRODUCTS OR SERVICES
PROMOTING ECONOMIC OPPORTUNITIES FOR INDIVIDUALS OR COMMUNITIES BEYOND JOB CREATION
Promoting health / Environmental preservation
Promoting Arts / sciences
NY specific public benefit
a positive effect (or reduction of negative effects) on 1 or more categories of persons, entities, communities or interests (other than stockholders) including, but not limited to, effects of an artistic, charitable, cultural, economic, educational, environmental, literary, medical, religious, scientific or technological nature.
DE public benefit
MUST OPERATE IN A responsible and sustainable manner.
DE MANDATE
GOVERNANCE
!
general / SPECIFIC PUBLIC BENEFIT
shareholders
employees
customers
community and societal considerations
local and global environment
short-term and long-term interests
NY MUST CONSIDER
!
the resources, intent and conduct (past, stated and potential) of any person seeking to acquire control of the corporation; and
any other pertinent factors or the interests of any other group that they deem appropriate
NY MAY CONSIDER
!
PECUNIARY INTERESTS OF SHAREHOLDERS
best interests of those materially affected by the corporation's conduct
PUBLIC BENEFIT
DE BALANCING ACT
ASSESSMENT
THIRD PARTY STANDARD REQUIRED
ANNUAL ASSESSMENT
NY ASSESSMENT
OBJECTIVE MEASUREMENT REQUIRED
EVERY 2 YEARS
DE ASSESSMENT
REPORTING
!
POST 120 DAYS AFTER CLOSE OF FISCAL YEAR
TO SHAREHOLDERS, PUBLIC & STATE
PUBLICLY AVAILABLE (EXCEPT OWNERSHIP AND COMPENSATION)
NY BENEFIT REPORT
!
rationale for selecting the third party standard
the ways in which IT pursued general / SPECIFIC public benefit
any circumstances that have hindered the creation of general / specific public benefit
third-party standard ASSESSMENT
SHAREHOLDERS HOLDING GREATER THAN 5% OF STOCK
SALARIES PAID TO DIRECTORS
NY BENEFIT REPORT
!
AT LEAST EVERY 2 YEARS
TO SHAREHOLDERS
MAY ISSUE MORE FREQUENTLY
MAY MAKE PUBLICLY AVAILABLE
MAY USE THIRD PARTY STANDARD
DE BENEFIT REPORT
!
objectives the board of directors has established to promote such public benefit
The standards USED TO MEASURE PUBLIC BENEFIT
Objective factual information based on those standards regarding the corporation's PERFORMANCE
ASSESSMENT OF CORPORATIONS PERFORMANCE
DE BENEFIT REPORT
GUIDENCE
!
SET OUT A SPECIFIC PROCESS FOR CONSIDERING / BALANCING STAKEHOLDER INTERESTS
APPOINT BENEFIT DIRECTOR
CLEAR NOTES ON BOARD MEETINGS TO DOCUMENT CONSIDERATION / DOCUMENTATION
PROCESS MATTERS
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