Stakeholder Capitalism Crosses Red-Blue Divide: 19 Rep., 16 Dem. Govs. Ink Public Benefits Corp. Statutes

Many of the same governors who have come out against Environmental, Social, and Governance (ESG) have signed into law public benefits corporation statutes which enshrine Stakeholder Capitalism into the corporate laws of their states for any organization which wishes to benefit from them. Beneath the rhetoric, well-known governors in both parties support the principles of Stakeholder Capitalism.

Note: The Enterprise Engagement Alliance, which other than being based on capitalist principles is strictly non-partisan, has initiated a Change.org petition encouraging politicans to unite around leaving alone a bi-partison reform concept most people can agree upon except those who favor state over private, public, or employee ownership.

By Bruce Bolger

19 Republicans, 1 Libertarian, 17 Democrats Sign Public Benefits Corp. Statutes
States With Public Benefits Corp. Statutes By Democratic or Republican Governor

What do such prominent conservatives as Rick Scott of Florida, Nikki Haley of South Carolina, Sam Brownback of Kansas, Mike Pence of Indiana, and Greg Abbott of Texas have in common? They like liberals Andrew Cuomo from New York, Deval Patrick of Massachusetts, John Hickenlooper of Colorado and many others all signed into law public benefits corporation statutes that enshrine into corporate law the principles of Stakeholder Capitalism for any company which elects to balance purpose and profit in their states.

These statutes allow publicly or privately held companies to run their organizations based on a clearly articulated purpose of their choice and to consider the interests of all stakeholders in fulfilling that purpose, while raising capital and distributing profits in conventional means privately or publicly. To comply, organizations must clearly state their purpose, report on how they engage with their stakeholders, and have their practices audited by a third party. Of course, consistent with Stakeholder Capitalism principles, companies have the right to conduct business any which way they legally choose to do so; let the free market to decide with whom investors and other stakeholders wish to engage.

19 Republicans, 1 Libertarian, 17 Democrats Sign Public Benefits Corp. Statutes

If anything, as the chart below shows, the statutes have received more support in conservative and libertarian states than in liberal states. Out of the 37 states and territories tracked based on the latest Wikipedia list of states with such 36 such statutes in 2018, 19 were in states with a Republican governor; 17 in states or a territory with a Democratic governor, and 1 in a state with a Libertarian governor. Puerto Rico enacted public benefits corporations in its territory after the Wikipedia chart was created; it has a Democratic governor.

Stakeholder Capitalism principles almost precisely align with those of public benefits corporation statues. According to Upcounsel.com, “A public benefit corporation is a corporation created specifically to benefit the public in some way. The focus is on both profit and mission alignment...Benefit corporations not only have the goal of profit maximization, but they also work to benefit the public in both general and specific ways. Benefit corporations must consider how their selections affect both shareholders and stakeholders.” Because customers, employees, supply chain and distribution partners, and communities in fact are critical to wealth creation, it's common sense to address their needs.

There are over 3,000 public benefits corporations in the US alone, including nearly two-dozen publicly held companies, notable brand names including Danone North America, Chobani, and Warby Parker. Click here for an EEA YouTube interview with Bart Houlahan, Co-Founder of not-for-profit B Lab, which helped pioneer public benefits corporation statutes and which helps promote and audit corporations seeking public benefits corporation status. He notes that a company does not have to have a statutory public benefits corporation status to benefit from having B corp certification by B Lab. Nearly 6,400 companies in 89 countries have received a B corp certification.

States With Public Benefits Corp. Statutes By Democratic or Republican Governor

Below is a 2018 Wikipedia chart outlining the status of public benefits corporation statutes in the US and the party of the governor in power at the time of approval added by ESM. Note that Puerto Rico enacted the laws under a Democratic governor following creation of the Wikipedia chart and that some of the states considered most "red" have public benefits corporation statutes signed by well-known conservatives, some of whom have already declared or let known their intentions to run for US president on an anti-ESG slate.

State Date Passed Date Enacted Party of
Governor

Arkansas	April 19, 2013	July 18, 2013	Republican
California	Oct. 9, 2011	Jan. 1, 2012	Democrat
Colorado	May 15, 2013	April 1, 2014	Democrat
Connecticut	April 24, 2014	Oct. 1, 2014	Democrat
Delaware	July 17, 2013	Aug. 1, 2013	Democrat
Florida	June 20, 2014	July 1, 2014	Republican
Hawaii	July 8, 2011	July 8, 2011	Democrat
Idaho	April 2, 2015	July 1, 2015	Republican
Illinois	Aug. 2, 2012	Jan. 1, 2013	Democrat
Indiana	April 30, 2015	July 1, 2015	Republican
Kansas	March 30, 2017	July 1, 2017	Republican
Kentucky	March 7, 2017	July 1, 2017	Republican
Louisiana	May 31, 2012	Aug. 1, 2012	Republican
Maryland	April 13, 2010	Oct. 1, 2010	Democrat
Massachusetts	Aug. 7, 2012	Dec. 1, 2012	Democrat
Minnesota	April 29, 2014	Jan. 1, 2015	Democrat
Montana	April 27, 2015	Oct. 1, 2015	Democrat
Nebraska	April 2, 2014	July 18, 2014	Republican
Nevada	May 24, 2013	Jan. 1, 2014	Republican
New Hampshire	July 11, 2014	Jan. 1, 2015	Democrat
New Jersey	Jan. 10, 2011	March 1, 2011	Republican
New Mexico	Feb. 18, 2020	Feb. 18, 2020	Democrat
New York	Dec. 12, 2011	Feb. 10, 2012	Democrat
Oregon	June 18, 2013	Jan. 1, 2014	Democrat
Pennsylvania	Oct. 12, 2012	Jan. 1, 2013	Republican
Rhode Island	July 17, 2013	Jan. 1, 2014	Libertarian
South Carolina	June 6, 2012	June 14, 2012	Republican
Tennessee	May 20, 2015	Jan. 1, 2016	Republican
Texas	June 14, 2017	Sept. 1, 2017	Republican
Utah	April 1, 2014	May 13, 2014	Republican
Vermont	May 19, 2010	July 1, 2011	Republican
Virginia	March 26, 2011	July 1, 2011	Republican
Washington, D.C.	Feb. 8, 2013	May 1, 2013	Democrat
West Virginia	March 31, 2014	July 1, 2014	Democrat
Wisconsin	Nov. 27, 2017	Feb. 26, 2018	Republican

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