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Delaware changes everything: Benefit Corp Legislation
It is possible that you missed it.
You didn’t notice the rumble on Wednesday morning—or perhaps you dismissed it as local construction work—or maybe a mild earthquake.
Whether you felt it our not, a seismic shift occurred this past Wednesday morning that may very well prove to be an inflection point in history. We may be witnesses to a turn in western economic systems. On 17 July, the Governor of Delaware, Jack Markell, signed into law a piece of legislation that provides the framework for businesses to legally structure themselves as “Benefit Corporations” in their pursuit of triple bottom line (people/planet/profits) success.
Delaware changes everything.
With 50% of US publicly traded companies—and 64% of the entire Fortune 500 list legally incorporated within the tiny state of Delaware—this state has been the standard bearer for 20th Century economic structure and the home to many of its greatest successes. While the trading may take place a couple hours up the road, Wall Street lives in Delaware.
So clearly (even if not obviously), Delaware matters.
This week The First State (an ever-appropriate nickname for a state leading the way) became the 19th US jurisdiction to pass this sort of Benefit Corporation legislation. While the particulars of these laws differ from state to state, the idea behind this framework remains the same. There must be something that falls between the worlds of for-profit and non-profit. Some via media—a middle road.
There’s no shortage of 21st century dilemmata keeping us up at night. The problems are certainly real, but the “no money” story we are so often told when it comes time for social programming may not be an absolute truth. Just because social service funds aren’t coming from where they once did (the benevolent city-state overlords, the Church, government) does’t mean that the money doesn’t exist. It’s just stuck. Stuck within a framework that is forced to blindly ignore fundamental stakeholders in pursuit of maximizing monetary return for financial shareholders. What Benefit Corporation status does in Delaware is make space for visionary entrepreneurs that want to harness the power of capitalism and bend their market interactions in such a way that brings about positive social impact for their employees, their communities and their environment.
So Delaware (I’m looking at you, Joe Biden circa 2016):
When it comes time to file the paperwork for your next business venture, you should know that you are no longer limited to the binary options too often caricatured as “cold-hearted for-profits”, or “restrictive non-profits”. You can now choose to be a Benefit Corporation—harnessing the significant power of business and using it to change the world (or at the very least, your block).
And everyone else:
If you are a business leader—you should consider B Corp Certification (available globally) and Benefit Corporation incorporation (a current reality in 19 US jurisdictions).
If you are a consumer—buy from B Corp Certified companies and encourage your favorite businesses to pursue certification. This is how we support and reward the companies that support our communities.
Fundamentally, all of this requires leadership. Leadership in our business communities, in our consumer circles, and in the halls of power throughout North America. The problems we face may be great—but the power of an entrepreneur with a good idea and a little bit of room to run will surprise you every time you give them the chance.
Thanks to Governor Jack Markell and the representatives in the State House, we can be sure that this entrepreneurial spirit is alive and well in Delaware.
Editor’s Note: This post was first published on the Huffington Post, entitled Joe Biden’s 2016 Business Plan?
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Joanne Cave MSc Candidate in Comparative Social Policy, Oxford University
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