March 30, 2010
MEDIA ADVISORY CONTACT: Senator Jamie Raskin, 410/841-3634 FOR IMMEDIATE RELEASE Delegate Brian Feldman, 410/841-3186
Kasey Wright, 410/841-3634
“We can become the Delaware of Benefit Corporations,” says Senator Raskin
Annapolis, Maryland – As of yesterday, both legislative chambers in Maryland have passed innovative legislation that will permit businesses in the state to assume a new corporate form called the “Benefit” or “B Corporation.” Senator Jamie Raskin (D-20) and Delegate Brian Feldman (D-15) introduced the legislation, SB 690/HB 1009, in order to encourage a “new wave” of green businesses and socially-conscious corporations to settle and register in Maryland.
“We can become the Delaware of Benefit corporations,” said Senator Raskin, hailing the unanimous positive vote in the Senate and the 135-5 vote in the House of Delegates.
Added Delegate Feldman: “This is the socially and environmentally-conscious branding that hundreds of corporations forming all over America are looking for.”
B Lab, a nonprofit organization founded by business leaders Jay Coen Gilbert, Bart Houlahan and Andrew Kassoy who have a “passion for creating a better world through business,” is responsible for christening the B Corporation model and for calling on state legislators to enact policy to embody the new form in statute.
If signed by Governor O’Malley, this first-in-the-nation legislation would allow companies to officially incorporate a social and/or environmental ethic into their charter. “This is for companies who want to build social and environmental priorities into their DNA,” said Senator Raskin.
The new law would offer legal protection to benefit corporation directors who make reasonable business judgments incorporating social and environmental values. Benefit status would be adopted via a shareholder vote and would send a signal out to customers and investors alike that the company has a greater purpose at heart than profits alone.
“The B Corporation model is not only an administrative and legal change in company structure, but perhaps just as importantly, it is a de-facto fraternity of like-minded companies that consider social responsibility to be integral to the way they operate their businesses,” said Lynn Ann Miller, President of 4GreenPs, one of the growing "green" businesses headquartered in the new Bethesda Green Incubator.
The B Corporation’s leadership, according to the legislation, would be required to publish and distribute to shareholders an annual report describing the ways in which it has executed the company’s promised social mission as well as its for-profit business activities. Additionally, the company would need to adopt and identify in its report a third-party standard for measuring its effect on the community at large and on the specific interests it has elected to focus on. It is expected that B Lab’s comprehensive certification process will be the standard of choice for many new B Corporations in Maryland.