The rise of the benefit corporation is in direct response to shareholder primacy. Under benefit corporation frameworks governed by state law, corporations that operate according to a “doing well by doing good” ethos may be shielded from a range of acquisition tactics and shareholder suits.
In the summer of 2017, two friends and I were seated around a table in a 24-hour donut shop. It was just past one in the morning; and, in the midst of glazes and sprinkles — and powered by bad coffee — we were launching a new company. Perhaps predictably, given the circumstances, our new venture would be called “Turdcules.”
Originating in rural Tennessee, and flavored by my background on the West coast in corporate social responsibility, Turdcules was to be a social enterprise concerning residential septic systems. In particular, our company would offer subscriptions of proprietary and eco-friendly cleaner packets to rival a certain ubiquitous market standard — let’s call it product X.
For each packet subscription sold, we would provide product to a nonprofit partner for distribution to rural Appalachian communities, where byproducts of improperly maintained lines often overwhelm family finances.
The business was slow to grow as we tested different development approaches; and ultimately, we took on active investors who steered the company in a different direction.
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