Benefit Corporation Law and Governance

CHAPTER SEVENOperating Benefit Corporations in the Normal Course

Benefit corporation statutes require directors of corporations to take the interests of a broad range of stakeholders into account, eliminating the concept of shareholder primacy. This chapter discusses how corporations operating in the normal course might operate to pursue this broader purpose, and how the business judgment rule will likely function when applied to this altered value proposition. Standards of review lie at the heart of corporate law. By examining how a court might review a shareholder challenge to an action taken by the board of a benefit corporation and contrasting that process with similar litigation involving a conventional corporation, we can gain insight into ...