04 Proposed legislation for profit, people and planet
“Benefit corporation legislation creates the legal framework to enable mission-driven companies like Patagonia to stay mission driven.”
– Patagonia founder Yvon Chouinard
Our team is proud to be involved in a working group comprising academics, lawyers, business leaders and governance experts who have drafted proposed amendments to the Corporations Act to include a new voluntary company structure to be known as a “Benefit Company”.
In Australia, there is some uncertainty for directors of for-profit businesses to consider the interests of wider stakeholders including employees, customers, contractors and the community when making company decisions. Although directors can choose to take non-shareholder interests into account, directors’ face some legal uncertainty about their statutory and fiduciary duties should they favour non-shareholder interests.
Under the proposed legislation, a company that opts to be a “Benefit Company” will enshrine the triple bottom line principles of “profit, people and planet” into its constitution, expand directors duties to require them to consider the interests of non-financial and financial stakeholders and report publicly on social and environmental performance as well as financial indicators.
The not-for-profit B Lab Australia and New Zealand is now working hard to lobby government to embrace these changes.