I am looking into the distinction between benefit corporations and B corporations to analyze which is more effective at promoting corporate social responsibility. I am also looking at the lack of regulation and auditing surrounding benefit corporations, and how they could be more effective if they had a higher level of supervision.
With the research I have done so far, it seems as though benefit corporations have a huge opportunity to become a new way to do business that prioritizes corporate social responsibility. There would obviously be challenges in this business form as well, but I think they have great potential. I have learned about the distinction between benefit corporations (a legal status administered by the state) and B corporations (a certification given by a nonprofit organization, B Lab). Companies can be one and not the other, both, or neither.
This government source added to my knowledge of how a business would go about incorporating as a benefit corporation. They can either incorporate in this form originally or may switch to it later by changing their articles of incorporation, as well as gaining approval from shareholders/the board of directors. There are several requirements companies must meet to incorporate as a benefit corporation, including setting a benefit director independent from the company to monitor progress towards benefit goals and stating the benefit goals that the company hopes to achieve. All benefit corporations are subject to changes in law regarding benefit corporations and must issue annual reports, including a benefit report that is available to the public stating the company’s progress towards benefit goals.
This research really just identifies the formal process of becoming a benefit corporation, but I think it would be useful to outline these points in my paper to add to the general understanding of benefit corporations. This is also a relatively new topic, so I could not find many other government sources to use.
I think this information is very reliable because it comes from the SEC’s website.