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Frederick Alexander: Benefit Corporations, B-Corps and the Shareholder Commons.

Frederick Alexander: Benefit Corporations, B-Corps and the Shareholder Commons.

Episode 14 Published 5 years, 9 months ago
Description
  1. Start of interview [1:38]
  2. Rick's "origin story" [1:55]
  3. His "traditional" corporate law practice for 25 years with Morris Nichols in Delaware ("the core of our advice followed two simple rules: shareholders get to elect the directors, and directors run the company for the benefit of those shareholders... all the rest is commentary") [3:45]
  4. How his focus changed in 2010 with B Lab's effort to push legislation in DE on benefit corporations [5:45]
  5. How B Lab's benefit corporations proposal differed from "constituency statutes" [07:50]
  6. Three sets of cases worth thinking about: 1) Pre-constituency statutes (shareholder primacy); 2) Constituency statutes ("it's a may, not a shall"); 3) Benefit corporations (only one case has been filed, in Virginia, and it quickly settled)  [10:41]
  7. The first benefit corporation statute was enacted in Maryland in 2010 [12:59]
  8. B Lab's push in Delaware, and how Rick joined B Lab. Some influence from Lynn Stout's "The Shareholder Value Myth."  [13:50]
  9. Although originally shunned by VCs, public benefit corporations incorporated in Delaware have raised ~$2.5bn between 2013 and 2019 per a recent study (based on 275 early-stage financings). Per Rick, total US fundraising by benefit corporations is in the order of $4 billion. [15:54]
  10. Evolution of legal structures for benefit corporations, expanding the BJR: B Lab's proposed MBCL, PBCs in Delaware, ABA version, British Columbia, etc.) [17:55]
  11. Accounting for social value "what gets measured, gets managed": SASB (sustainability metrics), GRI Standards, B Impact Assessment (score and certification). Pressure on the SEC and EU's metrics [26:16]
  12. Distinguishing benefit corporations (generic term, ~10,000 companies around the world), public benefit corporations (Delaware form, ~2,000 companies) and B-corps (certification by B Lab, ~3,500 internationally, of which only ~300 are benefit corporations). Danone's conversion to "Entreprise à Mission." [29:57]
  13. Traditional VC investors are investing in benefit corporations (not only impact investors) [34:20]
  14. Benefit corporations in public markets (3 IPOs, 3 conversions): Laureate Education (2017), Lemonade (2020), Vital Farms (2020). Brazil's
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