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The nonprofit that is behind the B corporation initiative has this to say about legal liability: Will the B Corp legal framework create additional liability fo

by cyrus_ 15y ago

The nonprofit that is behind the B corporation initiative has this to say about legal liability: Will the B Corp legal framework create additional liability for our Board of Directors and officers? It is the opinion of our attorneys that adopting the B Corp legal framework to expand the definition of the ‘best interests’ of the corporation should reduce the liability for Directors and Officers by creating legal protection (called ‘safe harbor’) for them to take into consideration the interests of multiple stakeholders when making decisions, particularly when considering financing and liquidity scenarios. Adopting the B Corp legal framework will, however, give shareholders additional rights to hold Directors and Officers accountable for taking into consideration these same interests when making decisions ‐‐ and that of course is the whole point. From the FAQ for investors and directors: http://www.bcorporation.net/resources/bcorp/documents/FAQs%20-%20Investors%20and%20Directors4.pdf http://www.bcorporation.net/resources/bcorp/documents/FAQs%2.... In your particular scenario involving SOPA/PIPA, the company's executives can straightforwardly claim that they acted in good faith to promote the interests of the broader business sector that they are a part of, and thus they would not be liable for their actions.

smsm42 15y ago
The thing here is that if they can claim good faith and it is a protection for them, then the whole setup is meaningless - they could always claim "we thought it's a good idea" even if shareholders think it's a terrible one. Public good is a matter of opinion, and anybody can claim any opinion. If, however, this provision is not toothless and useless, then I don't see how it can not create additional potential liability. Of course, it can play both ways - i.e. the management can both claim public good as defense for controversial actions and be attacked on public good grounds for them. It's just an additional complication, compounded by absence of any clarity on the question of what the said good is. It is telling that your document does not give a clear answer to the question of additional liability, basically saying "we're reducing liability, no, wait, we're increasing it and it's a good thing!".

by cyrus_ 15y ago

smsm42 15y ago

The thing here is that if they can claim good faith and it is a protection for them, then the whole setup is meaningless - they could always claim "we thought it's a good idea" even if shareholders think it's a terrible one. Public good is a matter of opinion, and anybody can claim any opinion. If, however, this provision is not toothless and useless, then I don't see how it can not create additional potential liability. Of course, it can play both ways - i.e. the management can both claim public good as defense for controversial actions and be attacked on public good grounds for them. It's just an additional complication, compounded by absence of any clarity on the question of what the said good is. It is telling that your document does not give a clear answer to the question of additional liability, basically saying "we're reducing liability, no, wait, we're increasing it and it's a good thing!".