What’s the benefit of a Benefit Company?

  • Around the world, laws are changing to recognise the shift in corporate approaches to stakeholder interests.
  • In this changing context, Australian corporate law should adopt Benefit Company, an opt-in legal status for companies that are for-profit and for-impact.
  • It provides an alternative legal status so that the core purpose of the company lives on through leadership changes, capital raises and sales.

paper heart men holding hands

There are many reasons as to why the stakeholders in a company might wish to preserve the values, philosophy and purpose of the company they have built together. Many businesses are started and succeed because an opportunity presents in the marketplace for a different approach or attitude. Such businesses succeed because of the stakeholders’ (shareholders, directors, employees, suppliers, customers, local community) adherence to the values which ignited the original vision of the founders.

In today’s socially conscious capitalist environment, preserving the philosophy and purpose of a company for future generations is essential to the success of the legacy of the company. And while there are many strategies and frameworks a business might implement to build programs and policies of social responsibility or enshrine such values and purpose, an alternative legal status for these companies would provide more certainty and clarity.

This article is exclusive to Governance Institute members and subscribers.

To read the full article…

or Become a member