They are registered as benefit corporation legal structures. “They” are the 300 companies who have been registered as such over the past four years, this according to Kyle Westaway, author of “Profit and Purpose”, and as noted by David Brooks in The New York Times.
For years friends and family members who share none of my interest in the markets have been harshly critical of unfettered capitalism. They look at profit-obsessed shareholders and the multi-million dollar compensated CEOs trying to please these shareholders and feel very bad things can come of this arrangement…the financial Armageddon being the most dramatic example, but there’s more. Pharmaceutical companies spending more on marketing than on R & D ( ever notice those young and attractive pharmaceutical reps dropping samples and goodies off at doctors’ offices?), rampant layoffs of lower and middle income workers to squeeze out an extra penny or two of profit per share, no real income increase for the majority of Americans over the past three decades, one in every five children in America living in poverty and, possibly worst of all, we’ve been forced to watch geeky, uncharismatic CEOs lead cult-like pep rallies.
My defensive response to the critique of capitalism has been that it is the best financial system for the most people..that the markets provide for pensions, 401k and 403b plans, and lead to technological and medical advances. But, truthfully, this answer never sufficed for them or me. Although the perfect is the enemy of the good and there are always going to be losers in any system of massive scale, it seems our system has created too many losers while excessively rewarding many of the winners.
300 benefit corporations are a drop in the capitalist ocean and could easily get swallowed up. But maybe not.