Contracting for Good: How Benefit Corporations Empower Investors and Redefine Shareholder Value

Note — Volume 100, Issue 6

100 Va. L. Rev. 1279
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A new business form known as a benefit corporation is now available in twenty-six states and the District of Columbia. The statues creating the new corporate form require directors to balance shareholders’ pecuniary interests with the needs of the community, the environment, and non-shareholder constituents, such as employees and consumers. These statutes appear to reject the notion that corporations exist to maximize shareholder value. This Note, however, proposes an alternative interpretation: Rather than creating duties towards the community at large, benefit corporations give voice to a class of shareholders who would prefer (at least in part) to fund corporate social initiatives with the very resources that would have been used to increase shareholder value. By serving both as the shareholders’ investment vehicle and preferred philanthropic organization, benefit corporations empower shareholders with greater control over the ends, and to a limited extent the means, of corporate governance. The result is an entity that embraces shareholder primacy more than the traditional corporate form itself.

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  Volume 100 / Issue 6  

A Tribute to Peter Low

By Paul G. Mahoney
100 Va. L. Rev. 1111

Reforming (and Saving) the IRS by Respecting the Public’s Right to Know

By George K. Yin
100 Va. L. Rev. 1115

Offsetting Benefits

By Ariel Porat and Eric Posner
100 Va. L. Rev. 1165

Transactionalism Costs

By Alan M. Trammell
100 Va. L. Rev. 1211