New laws took effect in Vermont and Virginia [July 11, 2011], giving ethical business a boost. If Vermont's law had been around 11 years ago, Ben Cohen and Jerry Greenfield might not have had to sell their ice cream company.
Back then, Unilever made the highest bid for Ben and Jerry's, so the laws of shareholder responsibility forced the hippie founders to sell, even though they wanted to keep control. Now, with today's law, a new kind of corporation is created that prevents exactly that, the Benefit Corporation. Vermont and Virginia join Maryland and New Jersey in recognizing the new form of company. More than a dozen other states are taking steps to catch up.
"This new class of corporation is a milestone for two reasons," says Kyle Westaway, a lawyer who studies corporate forms and represented Launcht, the first company to file and officially become a Benefit Corporation in Vermont. The law, he says, "broadens the goals of the corporation from [just] profit to: profit, people and planet. Secondly, the Benefit Corporation increases transparency and accountability, by using an independent third party to verify that a business is acting in a socially and environmentally conscious fashion."
Each Benefit Corporation must adhere to third party certification meeting certain environmental, social, or other non-financial standards. Many use the similarly named B-Corp Certification and Impact Assessment, which we've covered multiple times on GOOD.