Governor Brown Signed the Bill!
Oct 14 2011
by Melinda Cheel
The growing number of California entrepreneurs interested in creating businesses that offer social, environmental, and economic value now have support from the state. Earlier this week Governor Jerry Brown signed Assembly Bill 361, creating a new corporate form known as a benefit corporation. Benefit corporations are required to pursue the creation of a material positive impact on society and the environment, while meeting higher standards of accountability and transparency. Unlike the state’s general corporate law which requires businesses to maximize shareholder profits regardless of social or environmental impact, benefit corporations are required to consider impact on all stakeholders – communities, employees, and the environment.
RSF Social Finance has supported the bill since it was introduced by Assemblyman Jared Huffman (D-San Rafael) in February of this year. Don Shaffer, RSF President & CEO, testified in front of the California’s Assembly Judiciary Committee and the Banking & Financial Institutions Committee.
California is the largest economy in the U.S. and already home to many mission-driven businesses. “California is the seat of innovation; now California entrepreneurs are free to innovate to create value for society, not just shareholders,” said Jay Coen Gilbert, co-founder of B Lab, one of the sponsors of the legislation. “The enactment of benefit corporation law will give entrepreneurs the legal protection they need to maintain their mission and attract needed capital to grow.” B Lab offers a third party certification, known as B Corp, that measures social and environmental performance. Over 27% of the certified B Corps in the U.S. are in California.
California is the sixth state to pass benefit corporation legislation. Hawaii, Maryland, New Jersey, Vermont, and Virginia were the first five. Legislation has also been introduced in New York, Michigan, Pennsylvania, and North Carolina.
RSF is thrilled to be a part of this national movement and excited to witness the positive repercussions – more innovative businesses, new jobs, healthy communities, stronger economy – just to name a few.
Melinda Cheel is Senior Associate, Partnerships and Communications at RSF Social Finance