Earlier this spring, Vermont made a new path available. Through an initiative called the Vermont Benefit Corporation, it provided for a different class of organization — one that exists not simply “for profit” but “for benefit” and therefore expands the definition of fiduciary responsibility beyond an exclusive obligation to shareholders to encompass the interests of all corporate stakeholders, including employees, the local economy, and the environment. Are the directors of a Benefit Corporation still obliged to act in the best interests of the company’s owners? Absolutely. But they have legal protection to make investments with an eye to the long term, aiming for sustainable returns, not fast paybacks for shareholders. (To learn more about the Vermont Benefit Corporate Charter see this pdf of the enabling legislation, or you can read an excellent article here.)
Will Patten is the Executive Director of Vermont Businesses for Social Responsibility (VBSR), a statewide not-for-profit organization promoting triple bottom line business practices. It is the largest such organization in the US. Mr. Patten was formerly Director of Retail Operations for Ben & Jerry’s, where he retired after a 22 year career.