Known in many states simply as “benefit corporations,” these relatively new for-profit entities exist to produce a financial return and one or more public benefits. While traditional corporations must typically place “maximizing shareholder wealth” ahead of all other considerations, benefit corporations can consider other stakeholders, such as customers, employees, suppliers, the community and the environment. Managers of benefit corporations are legally protected from shareholder lawsuits, which gives them more leeway to place long-term profits and the needs of all stakeholders ahead of short-term profits and shareholders’ financial interests. Thirty-three states, including Delaware, one of the most popular states for corporate formation, have passed legislation recognizing benefit corporations.
As of mid-December, 54 U.S.-based advisory firms were B Corps, according to B Lab, of which 38 have completed the legal process to become benefit corporations. These firms are on the cutting edge of redefining business for profit and for good, joining the ranks of 2,356 B Corps globally, of which 1,108 are U.S.-based.
The First Affirmative Financial Network, Trillium Asset Management and the Caprock Group are some of the largest and best-known RIAs that have become B Corps.