“For us it’s really about marketing and it’s about recruiting,” said DiMagi Chief Operations Officer Carter Powers. According to corporate filings, DiMagi registered as a benefit corporation on Nov. 29.
According to the law, benefit corporations are required to have at least one benefit director, who ensures that the company actually does serve a public benefit, and the companies are required to produce an annual public benefit report. Companies may secure the designation just by filing for it; the law stipulates that benefit corporations must file their annual report with the state, shareholders and make it available to the public.
Shareholders serve as the watchdog to ensure that companies are actually committed to benefitting the public, according to Kassoy.
“The shareholders have a right of action,” Kassoy said. Beyond its image-boosting potential, the designation allows corporate officers to legally weigh how it can benefit the public alongside profits.
“They’ve changed the fundamental purpose of the company to be not just about creating shareholder value but also value for stakeholders,” said Kassoy.
Companies must use a “third party standard” to show how they are creating a public benefit – though not an outside auditor – and companies can also list specific benefits, such as providing low-income housing, promoting the arts, sciences and knowledge, improving public health and others, according to Kassoy and the language of the law.
Trish Karter, a Milton resident and co-founder of Dancing Deer Baking Company, said that she had tried to add some language about benefiting society to her corporation’s bylaws, but the board was concerned that would add a liability. Karter said the company provides English language training to workers, made a commitment to stay in Boston – recently relocating from Roxbury to Hyde Park – and uses environmentally friendly practices such as vegetable ink and limited packaging.
“I had always run the company that way,” said Karter, who was one of the people who brought the idea for the legislation to Joyce’s attention.