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0 pointsvmception5y ago0 comments

Basically people use B-Corps and similar concepts to make other people that are uncomfortable and skeptical of general capitalism feel comfortable by pretending there are safeguards built into the corporate structure preventing whatever they are uncomfortable with.

Charters can easily change, anything can be reincorporated at whim anywhere.

Also its typically just Shariah-Compliant investing rebranded for an Islamaphobic audience. S&P has a shariah index right across the border in Toronto Stock Exchanfe since forever while similar enterprisers push B-Corps and Public Benefit Corporations domestically as if they’ve “figured out” the code to sustainable for profit ventures through charter. Shariah in this context is very compatible with what these kind of investors and consumers are looking for, but they don't know it as they probably conflate it with human rights abuses.

People are just gullible, hope I unpacked that enough.

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usrusr5y ago

I see exactly one merit in B-corporations: the status makes it legal for management to to decide in favor of conscience over greed. It doesn't force them to decide conscience over greed, they can be just as profit-oriented as a regular corporation, but they can. At least management won't be sued by shareholders for rejecting a an unethical but legal profit opportunity. It's not the big difference some may expect, but it can be an important difference nonetheless (just like it can be no difference at all)

Grimm15y ago

It hasn't not been legal for a while.

https://www.lawschool.cornell.edu/academics/clarke_business_...

"Third, corporate directors are not required to maximize shareholder value. As the U.S. Supreme Court recently stated, "modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so." ( BURWELL v. HOBBY LOBBY STORES, INC. ) In nearly all legal jurisdictions, disinterested and informed directors have the discretion to act in what they believe to be the interest of the business corporate entity, even if this differs from maximizing profits for present shareholders. Usually maximizing shareholder value is not a legal obligation, but the product of the pressure that activist shareholders, stock-based compensation schemes and financial markets impose on corporate directors. The Shareholder Value Myth , Eur. Fin. Rev. Lynn Stout (April 30, 2013) The Ideology of Shareholder Value Maxim (Watch), Evonomics"

chipotle_coyote5y ago

AFAIK, modern corporate law never required that, and the Supreme Court was affirming the existing state of things. The "Shareholder Theory" stems from an essay Milton Friedman published in 1970 asserting that corporations have no responsibility to do anything other than maximize shareholder value, but this was never enshrined in law or financial regulation -- it was just something a lot of corporations followed. It seems in the intervening decades it's become such an accepted "truth" that people assume that it's a legal requirement.

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triceratops5y ago

There has never been a legal requirement for corporations to maximize profit. This is one of the greatest misconceptions propagated in the past 40 years.

A company's management has to act in the interest of shareholders, but that can be very loosely defined. A company that says "When making business decisions, we prefer protecting the environment over short-term profits, because our shareholders are humans living on Earth and without a good environment, our business would fail in the long-term" is not doing anything illegal. But if other companies don't follow suit, the eco-conscious company is in danger of being outcompeted.

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