benefit corporation

Today, Patagonia became the first company in California to elect benefit corporation status. Patagonia founder Yvon Chouinard led the largest group of businesses to register on the legislation’s first effective date among the 7 states that have passed benefit corporation laws. The dozen CEOs filed their documents at 9:30 a.m. as soon as the offices of the California Secretary of State opened. Scores of other businesses have expressed interest in registering in the next few months.

“After the ‘year of the protester’, it’s inspiring that a group of business leaders are taking action to create a positive alternative,” said Jay Coen Gilbert, co founder of B Lab, a non-profit organization that supported the legislation.

Benefit corporations are a new kind of corporation legally required to: 1) have a corporate purpose to create a material positive impact on society and the environment; 2) redefine fiduciary duty to require consideration of the interests of workers, community and the environment; and 3) publicly report annually on its overall social and environmental performance using a comprehensive, credible, independent, and transparent third party standard. Current law requires corporations to prioritize the financial interests of shareholders over the interests of workers, communities, and the environment.

“Patagonia is trying to build a company that could last 100 years,” said Patagonia founder Yvon Chouinard. “Benefit corporation legislation creates the legal framework to enable mission-driven companies like Patagonia to stay mission-driven through succession, capital raises, and even changes in ownership, by institutionalizing the values, culture, processes, and high standards put in place by founding entrepreneurs.” http://bclc.uschamber.com/csr-news/patagonia-registers-first-california-benefit-corporation