The Banking, Commerce and Insurance Committee heard testimony Feb. 3 on a bill that would allow a business corporation to become a benefit corporation.
Lincoln Sen. Danielle Conrad introduced LB751 to allow a business corporation to become a benefit corporation by a two-thirds vote of each class of shareholders. Conrad said the bill would benefit socially conscious businesses.
“This will help Nebraska compete by allowing corporations to elect to become benefit corporations if they so choose,” Conrad said. “It’s a way for entrepreneurs to signal to shareholders that, in addition to profit, they also have a social benefit that they are seeking to produce.”
The bill defines a benefit corporation as a domestic business corporation which would create a general public benefit, including:
• providing low-income or underserved individuals with benefit products or services;
• promoting economic opportunity for individuals in communities beyond creation of jobs in normal courses of business;
• protecting or restoring the environment;
• improving public health;
• promoting the arts, sciences or advancement of knowledge;
• increasing the flow of capital to entities with a purpose to benefit society or the environment; and
• conferring any other particular benefit on society or the environment.
Under LB751, the benefit director would be required to submit an annual report to shareholders explaining whether or not the corporation’s actions were in accordance with its stated public benefit purposes. The annual report also would detail the impact of its actions on shareholders, employees, customers, the community and the ability of the corporation to achieve its general public benefit purpose.
William Clark of Drinker Biddle and Reath, testified in support of the bill. He said the concept of benefit corporations is not a new idea.
“This is designed for people who want to pursue what we call the triple bottom line: profits, people and the planet,” Clark said. “These are businesses that want to conduct business for profit, but in a way that has a positive impact on people.”
Michael Wallace of Omaha also supported the bill, saying, “The intersection between business and the common good should not be seen as mutually exclusive.”
No one testified in opposition to the bill and the committee took no immediate action on it.