The new benefit corporation form, which has been statutorily recognized in at least 29 states and the District of Columbia, has three core elements that set it apart from traditional for-profit corporations: purpose, accountability, and transparency. Specifically, benefit corporations are generally1 required to (1) have a corporate purpose to provide a "public benefit" of some kind, (2) expand directors' fiduciary duties to require consideration of the interests of workers, community and/or the environment, and (3) provide annual or biennial public reports on the company's overall social and environmental performance, often against a comprehensive, credible, independent, and transparent third-party standard. This focus on "doing good in the world" makes benefit corporations a natural fit for mission-driven health care companies focused on healing and wellness.
Another type of "benefit corporation" is one privately certified by some outside party, such as B Lab®. B Lab has certified over 990 companies as B Corporations®. In 2011, about 20% of the companies certified by B Lab were in health-related fields, including insurance, wellness promotion, medication delivery, medical marijuana production, and development of products ranging from diagnostic equipment to organic teas. Examples include Freelancers Insurance Company,2 Renewal Care Partners,3 and Preciva Incorporated.4
Companies in the health care field should carefully consider whether incorporating as a benefit corporation, becoming privately certified as a benefit corporation, or some combination of the two, would help it in its overall mission and business focus. Our law firm's Benefit Corporation Team – which includes members of our firm's nationally recognized Health Care law team – stands ready to help you with the legal issues that arise from either approach.
1 See our Benefit Corporation Legislative Status Map and Chart for details about each state's pending or enacted legislation regarding benefit corporations.
2 www.freelancersinsuranceco.com. According to the company's website, it is a "first of its kind, social-purpose insurance company whose sole mission is to provide affordable, portable health insurance to independent workers."
3 www.renewalcare.org. "Renewal Care Partners provides home health care, skilled nursing, companion care, and care management services in New York City. As a B Corp, our mission is part of our organization's legal DNA—and regularly assessed by rigorous third-party standards."
4 www.preciva.com. "Preciva has developed a portable, wireless electronic test that will transform cervical cancer screening and treatment, dramatically increasing screening in low income countries where screening is currently rare and replacing the existing standard, the Pap test, in countries like the United States. We became a B Corp to be part of a community that shares our commitment to redefining what "business as usual" looks like. Being a B Corp allows us to contribute to a vital movement in the evolution of mission-driven business."
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