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martes, 5 de julio de 2016

The rapid growth in the number of U.S. states, as well as a growing number of European countries, enacting legislation introducing a new corporate structure known as “benefit corporations,” as well as the growing number of companies looking to register under this legislation, indicates that this a trend worth understanding. The following is a brief overview of this corporate structure, first introduced in the United States in 2010.

A benefit corporation is a corporation that must not only consider its shareholders, but also the social and/or environmental impacts that it is making in the world. The corporate purpose of these types of corporations must, under the governing state laws, include a statement affirming that that the purpose of the company will be to make a positive impact on society, in some capacity. 

As of the date of this publication, 31 of the 50 states in the U.S. have enacted benefit corporation laws and five additional states are in the drafting process. In 2005, even before the first law was enacted in the U.S., the United Kingdom also introduced what are known as “community interest company.” Other European countries, including Italy, France and Belgium, amongst several others, have also adopted similar, although not exactly identical, structures.     

This movement towards codifying a corporate structure that allows businesses to actively make decisions aimed at bettering their community is directly correlated with an increase in demand from U.S. investors, employees and customers who are putting greater pressure on companies to prove that they are wholly contributing to society, rather than just lining their pocketbooks. 

As a new generation, known as the millennials, begin to fill the workplace, there is a noticeable change in the demands they are putting on their employees to be socially conscious. This generation, as Forbes states, is “well-educated, tech savvy and idealistic”  and, as a result, they are most likely, if not already, also going to be playing a large role in shaping commercial practice as they lead entrepreneurial efforts and investment in the near future. Furthermore, as public awareness of business corruption or what is referred to as “corporate greed” grows, which was most recently highlighted in the movie the Big Short, so too does the demand that companies learn to give back. 

The benefit corporation structure allows businesses more flexibility in being able to make decisions that benefit both shareholders and communities, without feeling the pressure of shareholders to cut out programs that hurt their bottom line. In the large majority of states with benefit corporation legislation, there is an annual legal obligation that the company file a benefit statement, which highlights the social impact that the company is having and how that impact is fulfilling its stated corporate purpose. This makes it an obligation of Directors to assure that the company is fulfilling its purpose of impacting the world in some meaningful way. 

Hundreds of U.S. companies have now registered, in various states, to be benefit corporations, perhaps the most famous being Patagonia, one of the first and largest companies that has placed its social impact front and center in its corporate focus. As this trend becomes more popular across the globe, it is a corporate structure that Colombia may wish to consider in the future, particularly as it assists in taking some burden off the public sector, by allowing the private sector to help with social development.