Wall Street Journal article on new ‘Benefits Corporations’

I am by no means an expert on the structure of US companies but the article in today’s Wall Street Journal -‘With New Law, Profits  Take a Back Seat’   http://on.wsj.com/AjhIQ3 via @WSJ  struck me as interesting.

States across America are increasingly offering companies the option to become ‘Benefits Corporation’ – thereby allowing them to focus on priorities other than shareholders.

This looks potentially very significant for US SRI strategies – and possibly beyond.

Offering companies the option to define themselves and their objectives more broadly, and so reflect company cultures and aspirations better, looks to me as though it must be a good thing – providing decisions are made in the light of careful consideration.  Yet as some of the responses on the WSJ site already show – this can not be expected to be universally popular with investors.

It will be interesting to see how this pans out over the coming years … and in particular whether it helps or hinders business success … and what impact it really has on investor returns.   My hope is that this can bring across the board benefits (if you’ll excuse the pun).

I would be keen to hear other industry professionals thoughts on this!

 

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