[...] Today, Delaware—the touchstone of American corporate law, and thus the American corporation and capital markets—introduced benefit corporation legislation. This legislation creates a new type of corporation that will have similarly powerful effects, unleashing an Age of Social Innovation and marking a tipping point in the evolution of capitalism.
The Delaware Bar, Chancery Court, and elected officials spent the last several years examining various legal innovations, including benefit corporation legislation that has been signed into law in 12 states (and that is moving forward in more than a dozen others) and alternative models, such as the Flexible Purpose Corporation in California and the Social Purpose Corporation in Washington. The experts in Delaware decided that benefit corporation legislation best meets the needs of the growing market of entrepreneurs and investors interested in using business as a force for good. Importantly, with Delaware on board, leading social entrepreneurs and impact investors now have a clear path to scale via the public capital markets.
By requiring that Delaware benefit corporations “operate in a responsible and sustainable manner” and that their directors “balance the [financial] interests of stockholders … [with] the best interests of those materially affected by the corporation’s conduct” (including their workers, their community, and the environment), Delaware affirms that any new corporate form must be distinct and meaningful. This is accomplished by demonstrating that business exists in the context of society and ought to be accountable for its impact on society, whether or not that impact is captured by a financial statement. [...]