So if such corporation would be public and it would oppose, say, SOPA and I believed SOPA creates great public benefit and owned shares of such corporation, I could sue it for not promoting the public benefit and actually force the company to come out and support SOPA? How that makes any sense? And how the courts would even decide such case - no legal definition of public benefit exists or even possible?
If you wanted to make profits and to build a better world, what prevented you from setting a regular company and a charity and have the former donate to the latter? A lot of people donate millions of dollars this way.
It looks like it's one of those feel-good laws that everybody pats themselves on the backs about how they promoted public benefit and nobody even thinks about how it would work or what would be the consequences...
The nonprofit that is behind the B corporation initiative has this to say about legal liability:
Will the B Corp legal framework create additional liability for our Board of Directors and officers?
It is the opinion of our attorneys that adopting the B Corp legal framework to expand the definition of
the ‘best interests’ of the corporation should reduce the liability for Directors and Officers by creating
legal protection (called ‘safe harbor’) for them to take into consideration the interests of multiple
stakeholders when making decisions, particularly when considering financing and liquidity scenarios.
Adopting the B Corp legal framework will, however, give shareholders additional rights to hold Directors
and Officers accountable for taking into consideration these same interests when making decisions ‐‐
and that of course is the whole point.
In your particular scenario involving SOPA/PIPA, the company's executives can straightforwardly claim that they acted in good faith to promote the interests of the broader business sector that they are a part of, and thus they would not be liable for their actions.
The thing here is that if they can claim good faith and it is a protection for them, then the whole setup is meaningless - they could always claim "we thought it's a good idea" even if shareholders think it's a terrible one. Public good is a matter of opinion, and anybody can claim any opinion.
If, however, this provision is not toothless and useless, then I don't see how it can not create additional potential liability. Of course, it can play both ways - i.e. the management can both claim public good as defense for controversial actions and be attacked on public good grounds for them. It's just an additional complication, compounded by absence of any clarity on the question of what the said good is.
It is telling that your document does not give a clear answer to the question of additional liability, basically saying "we're reducing liability, no, wait, we're increasing it and it's a good thing!".
The better and more important question would be whether they were put in a benchmark like the Russell 1000 since it would force mutual funds to consider whether they should own it.
Russell excludes stocks trading below $1, stocks that trade on the pink sheets and OTC Bulletin Board, closed-end mutual funds, limited partnerships, royalty trusts, non-U.S. incorporated stocks (other than the benefits driven incorporations described above), foreign stocks, and American Depositary Receipts (ADRs). Hence registration on a stock exchange would be a pre-requisite to index inclusion. For example, Facebook, despite being valued at 80-100 billion US dollars, is not in the Russell index universe.
All public companies are C corporations. I'm trying to see if there is a requirement in the SEA or NYSE listing standards that mandate, this, but given the NYSE's requirement of fiduciary responsibility to shareholders, B corps produce a legal conflict of interest.
If you wanted to make profits and to build a better world, what prevented you from setting a regular company and a charity and have the former donate to the latter? A lot of people donate millions of dollars this way.
It looks like it's one of those feel-good laws that everybody pats themselves on the backs about how they promoted public benefit and nobody even thinks about how it would work or what would be the consequences...