Governor Martin O’Malley has just signed into law a new type of corporation. Deemed “Benefit Corporation,” the guidelines are simple, the corporation must by law create a material positive impact on society; consider how decisions affect employees, community and the environment; and publicly report their social and environmental performance using established third-party standards.
This is the first such legislation in our country, and for the first time brings the notion of social consciousness to the corporate world. Every decision one of these new companies makes must follow guidelines of positive employee interaction, environmental impact, community interaction, then report their decisions to a board that will judge then against standards which they set.
This legislation was offered by State Senators Jamie Raskin and Brian Frosh and Delegate Brian Feldman, passed the Maryland Senate with a vote of 44 - 0 and the Assembly 135 - 5. Brian Frost was recently in the headlines for his stance against mandatory sentencing of child molesters under the “Jessica Law.”
This latest partisan vote will allow a “third party,” to decide whether a company operates in the guise of betterment to society, which the Democrats seem to think is the proper way. No longer will companies just answer to their stockholders, but now a more sinister objective seems to be brewing. These companies will only be allowed to continue if the liberals say it may exist, bestowing an air of arrogance towards the legislature and Gov. Martin O’Malley
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The very fact that this went totally unreported by the main stream news sources speaks volumes about this Administration, and this socialistic policy.
Who is John Galt?
http://www.csrwire.com/archive/our_pick/319
Comments
If companies only answer to shareholders, how am I supposed to make an informed decision about the businesses I wish to visit? I don't like to spend my hard-earned money at places that I believe treat their employees poorly, conduct business unethically, or do other things I disagree with. This legislation will force companies to report these issues, and consumers will be able to make informed decisions.
Who likes going to a poorly run business? Nobody. Why make rules.
Anyway, I'm guessing this new model will get a really special tax status or subsidies from the tax payers.
Balti, so you think this is ok then huh? Every other business in our country's history has worked on a profit basis, but a board who decides who is ethical and who isn't is ok with you? Obviously you want the board stacked the way it will be, treating business as the big bad evil in our country, what you don't understand is that if it wasn't for that "big bad business" YOUR liberal government wouldn't have a dime to spend! You liberals make me sick!
Just another socialist law by socialist legislators.
Wonder what Ehrlich thinks about this?
Herb - Business isn't bad, but business can do bad things. Business is good. Corporations are good. I don't want my money going to Corporations (or their shareholders) who do bad things. In order to have capitalism, we need to be free to make rational choices. How can we make rational choices if we know nothing about the choices we make? This bill will help us make choices in the companies we wish to use. This isn't a liberal thing, it's as Capitalist as it gets, because it is about allowing the consumer to make choices based on as much information as possible.
Baltimoron this bill isn't about you making choices in a company based on social acceptance, it's about the government making those choices for the citizens, this bill is not pro-capitalism in any way shape or form, it's yet another government regulation.
Maybe you should spend more of your time investigating the company you wish to do business with and less time letting the government make that decision for you.
You know - all the rules, regs and laws seem to be designed to establish an entire industry with people who look for ways to weasel between those rules, regs and - they are called ambulance chasing lawyers . . . the more rules the better they like it
I have a better idea still! Let's apply this same regulation against the MD legislature! If they are detrimental to the citizens we could disband this group of thieves!
This situation forgets the first premise of business. For any business to survive it must garner the support of the Market for it's products and services. If it doesn't build the best product or provide the best service, typically both, for any product has to be supported by proper service at the most competitive price, the market will abandon that company. And of Course, the product has to be safe and effective to the benefit that is proscribed. And We can not miss the most important component the Business must be profitable. The story is only partially answered even at this point, but it would require a course in Business to answer this entiriely, and we don't have the time or room to explore and describe all of these details, but the most important detail is that the medling in the affairs of business by govenment is hurtful to the consumer and society. the Free Market is the best hedge against poor business practices, and ineffective products. America has best Markets in the World.
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