The New Be Good Business: Albany Gives Birth to New York’s Benefit Corporation
Wednesday, June 16, was a typical day in Albany. After arguing about ancient gladiators, senators approved a bill legalizing mixed martial arts in New York; the comptroller promoted a Web video scolding lawmakers for wasting time on the delayed state budget; and gubernatorial candidate Carl Paladino asked supporters to vote on names-Give Me Liberty, Joe Citizen, LiberTea-for his new party.
But then, quietly, something else happened. By a vote of 60 to 1, the State Senate passed a bill that if signed into law will create an entirely new species of company in New York. Sponsored by a state senator named Daniel Squadron, a 30-year-old who beat 30-year incumbent Marty Connor last election, bill No. S7855 makes room in state corporate law for a legal middle ground between nonprofits and ordinary businesses.
It is what's known as a benefit corporation, which, as an idea, has been around for years. But state laws allowing them to be established have been passed only in Maryland and Vermont, and so recently that they haven't yet gone into effect.
"I'm both a member of the New York State Senate and an eternal optimist," a bearded and bespectacled Mr. Squadron said this week. "You have entrepreneurs and investors who want to do good, but also want to do it in the context of all the capital and all the resources in the for-profit world." But the corporate duty to develop shareholder value, he said, doesn't leave room to pay serious attention to missions....
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