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The Benefits of Benefit Corporations

The Benefits of Benefit Corporations

An op-ed from Senior Partner Carol Hansell addressing proposed benefit corporations legislation in BC was published in The Globe and Mail on May 15, 2019. Quoting from the article:

If Canadians wish to invest in a company that is committed to acting “responsibly and sustainably,” should government facilitate that investment? That question is now before the British Columbia Legislature.

Bill M 209 was introduced in the B.C. Legislature on April 10, 2019 (its previous incarnation was Bill M 216 and was in second reading prior to the last Throne Speech). Bill M 209 would allow any company to designate itself as a “Benefit Company”. A benefit company would be required to act responsibly and sustainably and to pursue the public benefits set out in its articles. Examples of “public benefits” might be the provision of quality jobs to underserved members of the community or delivery of goods and services in a carbon neutral manner.

Benefit companies would operate within the same legal framework as other B.C. companies, with a few important exceptions. The fiduciary duty of directors and officers would be modified to require pursuit of its benefit purposes, alongside the obligation to pursue the interests of the corporation. Directors and officers would be protected from additional liability resulting from those modified duties. Benefit companies would be required to publicly report against an independent third-party standard with respect to its public benefit commitments.

Read the full article here.