The Business Lawyer
Mark J. Loewenstein, Benefit Corporations: A Challenge in Corporate Governance, 68 Bus. Law. 1007 (2013), available at https://scholar.law.colorado.edu/faculty-articles/441.
Benefit corporations are a new form of business entity that is rapidly being adopted around the country. Though the legislation varies from jurisdiction to jurisdiction, most statutes are based on a model proposed and promoted by B Lab, itself a nonprofit corporation. The essence of these statutes is that, in making business judgments, the directors of a benefit corporation must consider the impact of their decisions on the environment and society. The model legislation, though, may create serious governance issues for the directors of benefit corporations that operate under these laws. This article analyzes the model legislation and identifies its weaknesses, particularly with respect to governance issues.
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