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View Diary: The Start of a Revolution (126 comments)

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  •  Corps aren't legally required to only look at the (4+ / 0-)

    bottom line; they're legally required to hew to the articles of incorporation that set up the corp.  If the articles of incorporation are silent, then we assume that the corp is there to maximize profit.  I don't see any reason why a regular corp couldn't amend its articles of incorporation in order to interpolate other bottom lines (enviro, labor, etc)

    •  Right! From a quick look at the law, I think (1+ / 0-)
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      that's just what Yvon Chouinard did in Sacramento yesterday: file an amendment to the purpose clause in Patagonia's Articles of Incorporation to include the key phrase "This corporation is a benefit corporation." That language is the indicator that the corporation is governed by the Benefit Corporation provisions (Section 14600 et. seq.) of the California Corporations Code.

      The procedure's just like forming a close corporation. Once the required language is in the Articles, the corporation's governed by the General Corporation Law, except to the extent that the Benefit Corporation provisions conflict.

      Before this new law was enacted, a California corporation did not have the option of governing itself in the manner provided by the Benefit Corporation rules, which (among other things) establish a very different standard of fiduciary duty for the officers and directors—one that incorporates much more of the big picture than the existing standard centered on financial considerations.

      In the dull, dry world of corporate law, this is quite a paradigm shift!

    •  Yes, but without Benefit Corp status (1+ / 0-)
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      there wouldn't be any kind of third party standards to be legally held accountable by. A corporation could add that language simply to greenwash.

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