Lex Ultima empowers courageous leaders to build benefit corporations that deliver superior value for all their stakeholders, including stockholders, society and the environment.
Impact is the new measure of success. The benefit corporation offers several advantages over the traditional corporation, including:
A Multiple Stakeholder Model: Corporations adopting a multiple stakeholder model generally provide a superior of return to stockholders than traditional corporations with their single stakeholder model.
Embedded Principles of Sustainability: Corporations that adopt principles of sustainability generally provide a superior rate of return to stockholders than traditional corporations with their sole purpose of maximizing stockholder welfare.
A Dual-Purpose Model: The benefit corporation’s additional purpose of creating general public benefit makes it easier to recruit and retain employees, who seek employment with a more inspiring purpose than the traditional corporation’s sole purpose of maximizing stockholder welfare.
A Legal Commitment to Positively Impact Society and the Environment: The benefit corporation is more attractive to impact investors and conscious consumers than traditional corporations, which are encouraged by law and custom to externalize costs onto society and the environment.
Expanded Liability Protections for Directors: The benefit corporation offers better liability protections for directors to create public benefit than the traditional corporation, whose directors may be constrained by law from creating general public benefit.
An Antidote to Short-Termism: The benefit corporation with its dual purposes allows corporations to focus more on creating long-term value than on maximizing short term profits.
An Antidote to Activist Stockholders: The benefit corporation with its multiple stakeholder model defends corporations focused on creating long-term value against activist stockholders interested only in creating short-term value through a forced sale of the company.
More Flexibility in Sale of Company Transactions: The benefit corporation offers more freedom than the traditional corporation to choose a buyer who may better serve the long-term interests of all stakeholders and is more aligned with the corporation’s values over one who offers the highest price.
Specific Public Benefit: The benefit corporation allows a business to designate a particular public benefit in its charter, which allows greater alignment with its purpose and values than a traditional corporation with its limited purpose of maximizing stockholder welfare.
Supermajority Voting Protection: The benefit corporation offers a superior succession planning tool to preserve a business’ purpose, values and culture than the traditional corporation because a super-majority vote is required to terminate benefit corporation status.