After I spoke to Prof. Khavul’s Social Entrepreneurship and Innovation Class, The Grove (where I am a member) and I arranged for me to present a variation on that lecture. We would talk not just about business entities but would discuss benefit corporations. The format would be “Toolbox,” which means an informal discussion over brown-bag lunches.
First, I presented a powerpoint for which I had to use a .pdf file because I couldn’t get my .pptx or .odp files to work. Operator error! I have attached the .pdf version.
We covered my general recommendations that social entrepreneurs organize as corporations if they seek investors but LLCs if they really don’t. Then we talked about the differences between ordinary corporations and benefit corporations.
In a nutshell, the law is well-settled that in the ordinary for-profit corporation, corporate officers and directors are required to make business decisions based only on how they can increase shareholder value. If they take other things into account they can be sued or removed from office. But in the benefit corporation, corporate management is authorized to take other considerations into account, such as what the long-term impact of decisions will be, how those decisions impact the workers, what effect they will have on the local economy, and so forth. Please review the .pdf for a more extensive discussion.
After my presentation, the group of about ten asked many excellent questions. It was the kind of seminar that included what I call “cross learning:” Participants and the instructor all learn from each other. Excellent job, Grovers!