Do you have a great idea for a socially-responsible business? Are you concerned about how your company impacts society and the planet? As of June 7, 2012, a new form of business corporation, “the social purpose corporation” (SPC), is available in Washington State that allows corporations to adopt charters taking into account values other than pure profit maximization in making corporate decisions.
To put that in plain English: the legal objective of a corporation is to “maximize shareholder value,” i.e., to make a bunch of profit. Doing good for the environment or helping make the world a better place? Not part of the equation.
Many corporations recognize that being good corporate citizens also happens to coincide with building the value of the company by creating a positive brand and engaging with their customers. But officially, the board of directors and the company management is supposed to put profit above all else. Social purpose corporations promote a more balanced approach, allowing a company to weigh both profitability and community benefit more equally, maybe even sacrificing some measure of profit if that helps achieve other goals. SPCs are for-profit entities, but they can act more like non-profits.
I’m not a legal expert, but the folks at 501 Commons provide some guidance for companies contemplating this business model.
