It’s time for N.H. to encourage benefit corporations
They have the added duty to pursue an environmental and social benefit in addition to shareholder value
In 1995, Bill Whyte was working as a contractor. He built homes throughout New England, often suffering from cracked hands after working in the harsh cold. His basic home remedies weren’t doing much to help. So one night, his wife Katie Schwerin suggested that he could do better.
From the home batch of beeswax and olive oil spawned that night, Bill and Katie built a business that eventually became W.S. Badger Company of Gilsum, N.H.: maker of natural balms, sunscreens and healing products.
For 18 years, the company has grown and thrived. They have been listed as “one of the best small companies to work for in New Hampshire” and the New Hampshire Division of Economic Development’s Business of the Year.
Their company mission statement includes the goal “to run a business that is fun, fair and profitable; where money is fuel, not a goal; and where our vision for a healthier world finds expression.” They are devoted to supporting their local community and organic growers of natural products.
Badger is part of an exploding trend involving companies that want to incorporate a similar kind of social and environmental purpose into what they do. They still want to make a profit — no doubt about that. But they also want their company to fulfill a broader mission. And they have found that many investors, customers, and potential employees like to do business with a company like that.
The only question is: Do our laws allow it?
The answer, unfortunately, is: only sort of.
While there is nothing in our law that specifically stops a company from being environmentally sensitive or pursuing a social mission, our corporate law provides one and only one duty for corporations — to maximize shareholder value. And that leaves corporations that attempt to do anything more than that open to a shareholder right of action against them.
That is why I introduced legislation to create a slightly different form of incorporation for our businesses in New Hampshire.
Under my bill, companies can choose to incorporate as a “benefit corporation,” which functions exactly the same as any other corporation. It exists under the exact same corporate law. The only change is that benefit corporations have the right, and in fact an added duty, to pursue an environmental and social benefit in addition to shareholder value.
Twenty states have passed laws allowing benefit corporations, and 16 more are considering it right now. These laws have been totally bipartisan, fully supported by Republicans and Democrats. They have been enacted from Rhode Island to Oregon, and in our neighboring states of Vermont and Massachusetts.
What these states are seeing is what I am seeing — a demand by companies driven by market forces. In the Senate hearing on my bill, New Hampshire companies like Bagel Works and Hypertherm testified that they wanted to pursue this status. The Business and Industry Association supported it, so that our businesses can stay here and not have to look across our borders. Students testified about research showing that young people today want to work for companies with a clear social and environmental purpose, so that this may be the wave of the future for recruiting the best and the brightest.
The New Hampshire Senate has passed my bill, and I am hopeful that it will soon pass in the House. I want our businesses to have this option to help them compete, attract talent, market what they do to investors and customers, create jobs and stay competitive right here in New Hampshire. And I want them to have the option, if they choose, to have a broader impact benefiting our environment and our communities.
Molly Kelly, D-Keene, represents District 10 in the New Hampshire Senate.