8 States Now Allow Corporations to Do Good

I learned some scary things in law school, but the worst was that corporations have a legal obligation to maximize profit for their shareholders. Even if corporate leaders want to do good things like revamp operations to be more environmentally friendly, enact fair trade practices, or invest in policies to enhance employee satisfaction, they can’t without showing how the changes will benefit stock owners.

Add to that corporations’ status as (by definition) money-grubbing citizens with enormous influence on our politics and governance, and you should be scared too.

A relatively new corporate form is riding to the rescue by allowing certain corporations to pursue goals other than making bank for their owners. They are called Benefit (or simply “B”) Corporations. This corporate structure allows social entrepreneurs to incorporate but retain their social values and missons.

According to the website bcorporation.net, unlike traditional businesses, B corporations:

1. Meet comprehensive and transparent social and environmental performance standards;

2. Meet higher legal accountability standards;

3. Build business constituency for public policies that support sustainable business.

This month, Louisiana became the first Southern state and the eighth state overall to permit B Corporations. (The other states that have legalized the B Corporation form are New York, Maryland, Vermont, New Jersey, Virginia, Hawaii and California.) According to a press release from the New Orleans Business Alliance, “The legislation makes it possible for Louisiana companies targeting social and environmental return to place as much priority on these objectives as is placed on profit. This allows directors and officers more flexibility in their decision-making and gives socially conscious investors more assurance that their money will be used as intended.”

It also helps social entrepreneurs raise more money by selling so-called “impact investors” shares of their organization, rather than relying on donations as many non-profits do.

Rest assured that the website you are reading now, Care2.com, is a Benefit Corporation!

For more information, visit B Corporations.

Related Stories:

Care2 Success! New York Establishes Benefit Corporations

People-Powered Socially Responsible Investing: Report from SOCAP11 Day 2

California Can Lead on Socially-Conscious Businesses


Past Member
Past Member 2 years ago

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Froodo F.
Past Member 3 years ago

This written piece gives fastidious understanding yet. does full coverage cover another driver

Michael Kirkby
.5 years ago

We shall see. It's a breath of fresh air though and hopefully it catches on. There's nothing wrong with making profit provided you do so responsibly and care for the world around you equally.

Winn Adams
Winn A5 years ago


Melissah Chadwick
Past Member 5 years ago


Monica D.
Monica D5 years ago

Good news. Time for all of them to enact this. And B Corps should get preferential treatment, as suggested by David N.

Julie H.
Julie Hoffman5 years ago

Im trying to stay away from coopoerations when it comes to me working. They could do alot better. They are greedy.

Jerry t.
Jerold t5 years ago

And for how long this time? Corporations were originally designed to offer jobs. Money begets evil and evil holds sway in the land of free enterprise and conspicuous consumerism. It seems people hooked on materialism make easy targets for shysters.
These B class orgs will still have to survive, and pay workers. Will they hire B workers willing to do more for less for the common good?
How about a C corporation? C for community. Community owned farm, fishery, sports complex and such.
Want to think smaller gov? Then bring it down to community.
Note: Smaller gov equals smaller corporations, because the smaller gov can't regulate a larger than itself organization. Accumulating wealth is community theft.

David Nuttle
Past Member 5 years ago

Every state, and Congress, should support and give special advantages to "B" corporations that provide public, environmental, and other benefits in the process of seeking profits for their stockholders. Any corporation that only seeks to optimize profits for stockholders should be required to pay a much higher tax rate ... at the state & federal levels. A continued major focus on profit optimization may soon destroy our democracy. I call such profit focused entities as "M" corporations because some, like Monsanto, are "merchants-of-death" willing to destroy our planet and all life thereon to optimize profits. If you don't think so look at the damaging/ horrific results of Monsanto products like agent orange, dioxin, & 2-4-D 50 (w/ dioxin). I can only assume that Monsanto has a plan to relocate all their people to Mars after they succeed in the earth's destruction. (It could be that I'm a little hard on Monsanto, all they really want is to optimize profits by controlling worldwide food production w/ their GMO seeds/ plants ... and the harmful biotech products it takes to grow such crops.)

Danuta Watola
Danuta W5 years ago

Thanks so much for this great article, it was so interesting.