Why we need it
This change will provide certainty and clarity for directors to be able to make long-term decisions that benefit ALL stakeholders (employees, customers, community, suppliers and the environment) as well as shareholders.
It will also help the purpose-driven business movement to scale, by redefining how we measure success in business.
The Benefit Company will provide legal protection for directors who wish to make decisions that may not be financially advantageous to shareholders but are consistent with the company's expanded purpose of creating value for stakeholders. This aims to encourage directors to make decisions in line with shared value and responsible profit generation.
Being a Benefit Company will encourage impact investment by providing certainty that the company will remain accountable to its mission in the future. In Australia, the market for impact investing is expected to reach $32 billion over the next decade.
The Benefit Company will enable a company’s mission to be embedded into its constitution, creating a framework that enables directors to stay mission-driven through corporate succession, capital raising, and changes in ownership.
There is global cultural shift underway that is transforming our vision of the purpose of business, from only maximising shareholder value to a new vision that the purpose of business is to maximise value for society. Introducing the benefit company will help change the relationship between business and society and the way ‘success’ is defined in business.