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> The only real practical difference is that they give directors a little more leeway in their fiduciary duties to say "no" to doing evil things. I’d like to p

> The only real practical difference is that they give directors a little more leeway in their fiduciary duties to say "no" to doing evil things. I’d like to provide maybe a clarification here that there is zero existing fiduciary duty in regular corporations to say yes to evil things, or even to turn a profit at all. A for-profit C corporation can legally sell stock, lose money every year, and go out of business, if the board of directors approves that strategy. Fiduciary duty exists primarily in areas of accurate communication and the avoidance of crime, fraud, etc. A B corp basically is a C corp, but one that has formally published that their strategy includes a commitment to some social benefit. But if a C corp wanted to publish the same message to shareholders it could, and shareholder recourse would basically be to either try to replace the board, or sell the stock.

kube-system 2mo ago
Fiduciary duty absolutely does go beyond accurate communication and fraud. Directors have a duty of care that goes beyond simply not engaging in criminal fraud. Sure, you don't have to be competent, successful, etc. It is completely legal to suck at your directorship. But it's not legal to do something that you can't justify as being good for the business, which is where a public benefit activities can cross the line. Consider the eBay/Craigslist case, eBay Domestic Holdings v. Newmark: > When director decisions are reviewed under the business judgment rule, this Court will not question rational judgments about how promoting non-stockholder interests—be it through making a charitable contribution, paying employees higher salaries and benefits, or more general norms like promoting a particular corporate culture—ultimately promote stockholder value. Under the Unocal standard, however, the directors must act within the range of reasonableness. Ultimately, defendants failed to prove that craigslist possesses a palpable, distinctive, and advantageous culture that sufficiently promotes stockholder value to support the indefinite implementation of a poison pill. Jim and Craig did not make any serious attempt to prove that the craigslist culture, which rejects any attempt to further monetize its services, translates into increased profitability for stockholders. https://courts.delaware.gov/Opinions/Download.aspx?id=143440 https://courts.delaware.gov/Opinions/Download.aspx?id=143440 This is where a PBC would have been different. With a PBC, courts are directed to balance the the stockholders interests with the company's stated public benefit.
- snowwrestler 2mo ago
  Craigslist the corporation was not even a party to this suit, and it continued operating the same way after this decision as before it. eBay’s only recourse to that was to sell its equity, which it ultimately did in 2015. I don’t think anyone can look at the company Craigslist in 2026 and say it has spent the last 30 years satisfying a legal duty to maximize profit.
  - kube-system 2mo ago
    The case was about Craig and Jim's stockholder-rights plan which they put into place to protect the direction of the company after their death. They're still alive... so of course, the past 30 years don't have anything to do with it. The point of my example was the legal standard used.

kube-system 2mo ago

Fiduciary duty absolutely does go beyond accurate communication and fraud. Directors have a duty of care that goes beyond simply not engaging in criminal fraud. Sure, you don't have to be competent, successful, etc. It is completely legal to suck at your directorship. But it's not legal to do something that you can't justify as being good for the business, which is where a public benefit activities can cross the line. Consider the eBay/Craigslist case, eBay Domestic Holdings v. Newmark: > When director decisions are reviewed under the business judgment rule, this Court will not question rational judgments about how promoting non-stockholder interests—be it through making a charitable contribution, paying employees higher salaries and benefits, or more general norms like promoting a particular corporate culture—ultimately promote stockholder value. Under the Unocal standard, however, the directors must act within the range of reasonableness. Ultimately, defendants failed to prove that craigslist possesses a palpable, distinctive, and advantageous culture that sufficiently promotes stockholder value to support the indefinite implementation of a poison pill. Jim and Craig did not make any serious attempt to prove that the craigslist culture, which rejects any attempt to further monetize its services, translates into increased profitability for stockholders. https://courts.delaware.gov/Opinions/Download.aspx?id=143440 https://courts.delaware.gov/Opinions/Download.aspx?id=143440 This is where a PBC would have been different. With a PBC, courts are directed to balance the the stockholders interests with the company's stated public benefit.

snowwrestler 2mo ago
Craigslist the corporation was not even a party to this suit, and it continued operating the same way after this decision as before it. eBay’s only recourse to that was to sell its equity, which it ultimately did in 2015. I don’t think anyone can look at the company Craigslist in 2026 and say it has spent the last 30 years satisfying a legal duty to maximize profit.
- kube-system 2mo ago
  The case was about Craig and Jim's stockholder-rights plan which they put into place to protect the direction of the company after their death. They're still alive... so of course, the past 30 years don't have anything to do with it. The point of my example was the legal standard used.