From the
Maryland Gazette Friday, April 23, 2010 talking about benefit corporations and mentioning Lateral Line
————
Friday, April 23, 2010
State pioneers B corporations
Company charters consider the community, as well as profits
by Kevin James Shay | Staff Writer
Lateral Line is a company on the cutting edge of businesses that put social and environmental responsibility in their charters — even when those principles may cut into profits for shareholders.
The Easton
fishing apparel company was certified several years ago as a B corporation — B is short for benefit — by the nonprofit B Lab of Berwyn, Pa. This fall, when Maryland’s new law that formally recognizes B corporations takes effect, Lateral Line plans to be among those that seek that status.
The decision to gain the designation from B Lab was a no-brainer because the company was already practicing that business philosophy, said Brandon C. White, CEO or “chief angler” of Lateral Line. The company sells technologically advanced year-round fishing apparel. Among Lateral Line’s programs is a “2 percent for the Fish” initiative that supports fisheries conservation.
“What it does do for us is certifies that we are walking the walk, and are not doing what we do or saying we do what we do for marketing purposes,” White said. “It also gives us, fellow B corp companies, a unified voice which can help in many different aspects of business.”
This month, Gov. Martin O’Malley (D) signed the bill into law, making Maryland the first state to recognize benefit corporations, which allow for-profit businesses to incorporate social good and environmental principles into their charters.
A key aspect of the law is affording B corporations’ directors legal protection if shareholders sue because the company’s public-service goals conflict with bottom-line interests.
Maryland businesses have been contacting B Lab, which helped frame the state’s new B corporation law, to learn about the conversion process, said Bart Houlahan, a co-founder of B Lab.
“The response from companies interested in this in Maryland and nationwide has been overwhelming,” Houlahan said. “Maryland has the potential to be the Delaware of benefit corporations.”
Gary Skulnik, co-founder and president of Rockville renewable energy broker Clean Currents, said he plans to look into whether the company should pursue converting to a B corporation. “The concept is a good idea,” he said.
B Lab has certified about 300 companies around the country as B corporations, with combined revenues of more than $1.1 billion. Lateral Line is the lone one in Maryland. Others include Reston, Va., telecommunications company BetterWorld Telecom; Washington, D.C., software business PICnet; and West Grove, Pa., footwear company Dansko.
The Vermont legislature is also considering a B corporation law. Ben Cohen and Jerry Greenfield, founders of Vermont ice cream company Ben & Jerry’s Homemade Holdings, said in an Associated Press story that if the state had had such a law back in 2000, they might have been able to fight off potential shareholder lawsuits and resist selling the company to Unilever. The British-Dutch food and consumer products giant bought the ice cream business in 2000, for $43.60 per share, or $326 million, well above its closing stock price a day earlier.
There is also interest in other states, including Pennsylvania, New York, North Carolina, Oregon, Washington and Colorado, Houlahan said.
Maryland companies that want to become B corporations will need to amend their articles of corporation, with those changes approved by their boards and shareholders, Houlahan said. They then need to file the documents with the Secretary of State’s Office.
Benefit corporations must provide an annual report to stockholders that details how the company pursued its public benefits and what circumstances may have hindered its goals within 120 days after the end of the fiscal year.
The Maryland law, which takes effect Oct. 1, passed with little resistance. The Senate version was approved 44-0 and the House bill 135-5.
“That was encouraging to see such strong support,” Houlahan said.
A new approved IGFA World Record from Virginia saltwaters. Male 20 pound Tippet Fly Rod Class Striped Bass weighed in at 51lbs, 5oz
