Maryland's first-in-the-nation legislation permitting Maryland businesses to form benefit corporations took effect Oct. 1, and 13 Maryland businesses have incorporated as benefit corporations since then.

Why are benefit corporations so exciting? Benefit corporations are a new corporate form that integrates social and environmental impact of a corporation into their operations. They include the consideration of non-financial interests – such as environmental impact - when making corporate decisions.

 Nov. 10, a group of over 30 business owners, attorneys and county representatives gathered at Bethesda Green for a panel discussion about why benefit corporations are important for local businesses and the sustainable business movement as a whole.  The discussion was filled with details about this new corporate entity that is raising interest across the United States and abroad, and the role that Maryland is playing in the implementation of new standards for corporations.

Amy Kincaid of Change Matters moderated a stellar panel that included Kasey Wright, legislative aide to Sen. Jamie Raskin (D-Dist. 20), who sponsored the recently-passed legislation. Also featured were Jay Coen Gilbert, co-founder of B-Lab, a non-profit that certifies businesses as socially and environmentally conscious companies; Laura Jordan, a benefit corporation attorney; and Pennye Jones-Napier and Julie Paez, owners of The Big Bad Woof , a pet supply store that offers locally-sourced pet foods and eco-friendly products for pets.  The Big Bad Woof is the first company to register as a benefit corporation in Maryland – and the United States, given the landmark legislation – and was honored earlier this week at SmartCEO's ECO CEO awards.

Jay spoke to business owners directly about the unique opportunity provided by the Maryland legislature for businesses to incorporate as a benefit corporation.  "It's quite unusual for the political leadership to be out ahead of its citizenry.  They've handed you the keys to the kingdom.  All eyes are on Maryland," he said.

Using the mantra of People, Planet and Profit, a benefit corporation is held to a high standard of transparency and reporting when it comes to their operations and their impact on society and the environment.  "The big trump card is the third party accountability," Jay said.

"These corporations are legally bound to act in the broader public good.  Before benefit corporations, corporations had one objective which was to maximize profit.  Benefit corporations also include consideration of the social good," said Kasey Wright. 

In response to questions about the challenges of operating a corporation with more than one objective, Laura Jordan emphasized a positive aspect to the combined objectives of people, "planet and profit."  "It builds in and ties into the best of our free market economy," Laura said.

Pennye Jones-Napier and Julie Paez talked about creating and operating The Big Bad Woof and their choice to provide eco-friendly pet products to customers as well as a range of benefits to their employees, unusual for a business of their size.  "We're a mission aligned company," said Pennye.   "This legislation speaks to the way we think about our companies and the way we develop our companies." 

The owners also appreciate the accountability required to operate as a benefit corporation. Pennye continued, "We see and hear claims from other companies all the time that their products are eco-friendly.  Now we can say 'prove it'.

With this first-in-the-nation legislation in effect for just a few weeks, we will certainly be hearing more about benefit corporations in the coming months.  To learn more about benefit corporations and the recent Maryland legislation, Change Matters and B Lab provide information on their sites, and we are hoping that Bethesda Green will continue to provide a forum for discussion.