Gov. Stitt signs B. Corp bill
When Gov. Kevin Stitt signed House Bill 2423 into law earlier this month, a new-to-Oklahoma class of incorporation was created, called a “benefit corporation.”
A benefit corporation is a new legal tool that creates a solid foundation for long-term mission alignment and value creation. While officers at a traditional corporation have a responsibility to earn a profit for shareholders, a benefit corporation can be more transparent about decisions to protect the environment, encourage civic growth or grow employment in a depressed area, for example.
“A benefit corporation is a traditional corporation with modified obligations committing it to higher standards of purpose, accountability and transparency,” said Kelsey Karper, co-founder of Oklahoma City’s Factory Obscura, an artist collective.
Karper said Factory Obscura incorporated in Delaware to get benefit corporation status and will register in Oklahoma as a benefit corporation when the law goes into effect later this year.
“The passage of this legislation is good news for us,” she said. “The fees and taxes that we had paid to Delaware will now be paid to our home state. We are committed to Oklahoma and want to be very involved in the OKC community.”
Benefit corporations are committed to considering the company’s impact on society and the environment in order to create long-term sustainable value for all stakeholders. Benefit corporations are required to regularly report to shareholders on how the company is balancing these interests.
“Benefit corporations build the values of a company into the structure of the company,” Karper said. “During leadership changes, this helps assure employees and other stakeholders that the values of the company will remain the same. In the case of Factory Obscura, we have a social responsibility to our employees, the community and the planet.”
Benefit corporation legislation has been passed in 31 US jurisdictions including Delaware. Italy has also adopted benefit corporation provisions.
There are already close to 5,000 registered benefit companies. Leaders in the group include: Patagonia, Method Home Products (a subsidiary of Ecover), Plum Organics (a subsidiary of Campbell Soup Company), Cotopaxi, Data.world, Lung Biotechnologies (a subsidiary of United Therapeutics), Kickstarter, Ello, Altschool, Farmigo, and Alliant University. Laureate Education Inc., a $4B revenue for profit education company backed by KKR, recently raised $490 million in an IPO. Laureate was the first benefit corporation to go public as well as the largest benefit corporation in the world.
"Our goal is to become a certified B Corporation,” added Karper. “B Corp Certification is the only certification that measures a company’s entire social and environmental performance and proves we are meeting the highest standards of verified performance. It sets the gold standard for good business.”