Laura Jordan, JD, managing principal at The Capital Law Firm, recently spoke to Marymount students and faculty in the School of Business Administration about the advantages of benefit corporations, a new business classification that allows a company to include in its mission both the profit motive and a commitment to having a positive societal impact. Jordan explained, “The concept is to do good and make money.”
Jordan was an early advocate of benefit corporations. After the initial authorizing statute was approved by the Maryland legislature, she formed the first benefit corporation in the nation in 2010. Since that time, 12 states and the District of Columbia have authorized benefit corporations, and the trend is rapidly spreading across the nation.
The genesis for benefit corporations arose from liability restrictions placed upon traditional corporations if they fail to make shareholder profits paramount in their business dealings. In contrast, by declaring a public mission, benefit corporations are mandated to expand their fiduciary duty to consider non-financial interests when making decisions. However, they are also required to report annually on the overall social and environmental performance of their mission, using reputable third party measurements.
Jordan noted that benefit corporations are not just the result of public-spirited corporations, who have aligned their business models with personal philosophies; their rise can also be credited to market demand. She said, “The trend is clear that consumers are willing to spend money on things they believe in. So, there’s been a perfect storm to create something new.” She gave the example of consumers increasingly supporting businesses that market local fare, even if it costs more. Benefits include more local jobs, more money staying in the local economy, and potentially fresher products.
However, business is business, and Jordan concluded by reiterating that benefit corporations are essentially for- profit businesses that have a social impact. She encouraged the audience to employ the power of business to change the world by supporting and promoting for-profit social entrepreneurships. Jordan advised, “Take your Marymount education and the idea of serving others, go out in the world, and be a change agent for good.”
Photo Caption: Laura Jordan with James Ryerson, dean, Marymount School of Business Administration