Students for a Better World: The Beyond the Classroom Blog

Stories, Resources, & More from the Beyond the Classroom (BTC) Program at University of Maryland

The Potential of Benefit Corporations as an Advantageous Business Structure: An Evening with Laura Jordan

2 Comments

by Shefali Khanna, Beyond the Classroom Student

BTC hosted Laura Jordan who shared her experiece working with Benefit Corporations in Maryland. She has the distinction of incorporating the first company of its kind in the United States.

As a part of the film and faculty series on “Critical Conversations on Civic Issues: Beyond the Financial Crisis,” BTC hosted Laura Jordan, Managing Principal, Capital Law Firm, PLCC on November 14.   Her discussion focused on benefit corporations. According to Jordan, these are corporations that strive to maximize shareholder profits and create a “general public benefit,” which is explicitly included in the corporation’s charter. The specific public benefits could include preserving the environment, improving human health, or providing economic opportunity to individuals and communities beyond job creation. These activities are annually measured against a third party standard that is developed by an independent entity. At the end of each fiscal year, the corporation will deliver an annual benefit report to each stockholder that contains detailed information on ways in which the benefit corporation pursued a general public benefit during the year and an assessment of the societal and environmental performance achieved by the corporation. By law, this report must be made publicly available.

The speaker is an admirable attorney and concerned citizen who helped her clients develop this path-breaking sustainable industry model. Maryland is the first state to have legalized benefit corporations. At the event, she convinced a large part of the audience that benefit corporations increase market efficiency by facilitating a close alignment between the true costs and benefits of consumers’ purchase decisions. The portion of profits spent on activities that provide a public benefit are not taxed, and these corporations now have an extra marketing tool that gives them a competitive advantage. Finally, it is clear that these benefits enhance freedom of choice and limit government intrusion, which would make the concept appealing to policymakers on either side of the spectrum.

The Big Bad Woof, now with two locations in Maryland, was the first benefit corporation in the United States.

_______________________________________________________________________

Edited for clarity and length by Dr. Caitlin Haugen, Assistant Director, Beyond the Classroom

Author: btcblogger

Beyond the Classroom (BTC) engages talented and diverse upper level undergraduates from across the university in a selective interdisciplinary living and learning community focused on civic engagement and social change in a global context. The BTC program prepares students to be active and responsible citizens and leaders in a complex, multi-cultural, and global society. We encourage students from all disciplines and majors to realize and develop their potential through an integrated program of academic, experiential, and service components. The Washington, D.C., metropolitan area, the world’s largest nonprofit and nongovernmental sector, becomes a place of learning through exciting internships and civic learning experiences.

2 thoughts on “The Potential of Benefit Corporations as an Advantageous Business Structure: An Evening with Laura Jordan

  1. Pingback: Beyond the Financial Crisis Course Offers New Perspectives « Beyond the Classroom Blog

  2. Pingback: Civic Learning Trip to Bethesda Green Inspires Students to Consider the Potential of Green Businesses « Beyond the Classroom Blog

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s