Big news this week – Appropriate IT Inc, a Delaware incorporated corporation, has converted to a different corporate structure on
June 3rd May 29 **. We are now Appropriate IT PBC, a Delaware Public Benefit Corporation. Yay!
So, what is a PBC? A Public Benefit Corporation (PBC) is a new kind of corporate entity, so new that the Delaware Senate Bill #47 that brought PBC into existence is not even a year old yet. According to the law:
A public benefit corporation is a for-profit entity which is managed not only for the pecuniary interests of its stockholders but also for the benefit of other persons, entities, communities or interests. Delaware General Corporation Law Sections 362(a) and 365(a) create and impose on directors of public benefit corporations a tri-partite balancing requirement. Public benefit corporations must be managed in a manner that balances:
- the stockholders’ pecuniary interests,
- the interests of those materially affected by the corporation’s conduct, and
- a public benefit or public benefits identified in the corporation’s certificate of incorporation.
Why is there a need for a PBC? A New Kind of Corporation to Harness the Power of Private Enterprise for Public Benefit on Huffington Post explains the need and reasoning in detail. Here are some excerpts:
Many of the businesses considering this new corporate structure … feel understandably constrained by existing corporate law that recognizes only one legitimate corporate purpose — to maximize value for stockholders.
These new Delaware public benefit corporations will harness the power of private enterprise to create public benefit.
Delaware public benefit corporations will … have three unique features that make them potential game changers. These three features concern corporate purpose, accountability, and transparency.
…as the next generation of publicly-traded companies comes into being, benefit corporations will be among them, helping to build public trust in business, and becoming an attractive investment opportunity for the growing number of investors who increasingly want to make money and to make a difference.
Appropriate IT has always had a “returns + impact” approach to doing business. Translated into the tri-partite responsibility of the PBC laws above, it means:
- We care (a whole lot, since we won’t even be able to exist otherwise ;)) in making a profit and providing a return on investment.
- While also caring about (and for) our staff, partners, communities we serve, and the beautiful, pale blue dot that we all call home.
- And, our mission “harnessing the power of technology to advance social justice, equitable access, and inclusive international development” is also our corporate purpose for existence now.
As a for-profit social enterprise, we are super delighted to have a corporate structure that better reflects what we are trying to achieve, both in material and non-material terms. And, that we don’t have to compromise one or the other. And… (here comes the cool factor :)) we join the likes of Method and Warby Parker in this attempt to define a conscious and socially engaged capitalism. So yay! Double yay!! And triple yay!!! :-D
** June 10 Update: AI changed its corporate structure on May 29. Delaware approved the application and issued an amended certificate of incorporation on June 3.