Non-Evil Firms

Are corporations intrinsically evil because they must by law only maximize profits? I don’t think so, but if you do, you might prefer to do business with a benefit corporation whose goals you respect. By law, a benefit firm must first try to achieve its declared goals:

Fifteen benefit corporations have been created in the three months since new [Maryland] legislation, signed into law in April, took effect. … At its core, benefit corporations blend the altruism of nonprofits with the business sensibilities of for-profit companies. These hybrid entities pay taxes and can have shareholders, without the risk of being sued for not maximizing profits. Companies can consider the needs of customers, workers, the community or environment and be well within their legal right.

A benefit corporation, for instance, could choose to buy from local vendors at a higher cost to reduce its carbon footprint, much as the Big Bad Woof does. The company, as a part of the incorporation, is required to file an annual report on contributions to the goals set forth in the charter and submit to an audit by an independent third party. … There are no tax breaks or procurement incentives for benefit corporations in Maryland, but the classification offers a competitive advantage … A 2010 Cone study … [found] 61 percent of consumers surveyed had purchased a product because of the company’s long-term commitment to a cause or issue. …

Shortly after Maryland passed the benefit corporation legislation last year, Vermont got in on the act. Several other states, including New York and California, are considering similar bills. New York is one of 31 states with a “corporate constituency statute,” which allows for the consideration of non-financial interests but lacks the full protection of the new law. (more)

As Mr. Burns would say, “Excellent.”

So if benefit firms became more common, would people still habitually think them evil?  Would it matter much?

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