Legislation to allow benefit corporations to operate in Alaska passed the House on May 16 by a vote of 28-11, and now goes to the Senate for consideration.
HB 124, sponsored by Rep. Sam Kito, D-Juneau, would bring Alaska’s corporate law in line with 31 other states that have passed legislation allowing for such profit organizations that incorporate public benefits and community improvements into their business model.
“Passage of this bill in the House is a big step toward allowing boards and shareholders to consider more than just their fiscal bottom line when making business decisions,” Kito said. “I believe there will be benefits to Alaska if corporations have the freedom to make decision that will benefit the public and their community without fear of violating the long-held fiduciary duty of corporations to make the financial impact to their shareholders the top priority.”
HB 124 inserts language into state statute allowing for creation of benefit corporations with specific measures to ensure transparency and accountability. All benefit corporations will be required to publish biennial reports describing actions taken for the general public benefit.
There are currently over 1,700 benefit corporations in the United States, including Patagonia and the King Arthur Flour Company.
“Over $6 trillion is invested annually in corporations that make business decisions for the public benefit and I am hopeful passage of this bill will allow many of tose dollars to be invested in Alaska,” Kito said. “Such investments will be good for corporate shareholders and good for the people of Alaska.”
