Idaho Business Review Quotes Kris Ormseth Regarding Idaho's New Benefit Corporation Law

Partner Kris Ormseth was quoted in the Idaho Business Review in an article titled “With law passed, companies can now declare public benefit.” The article discusses the recent passage of an Idaho law that allows companies to register as “benefit corporations,” which, unlike traditional companies, can take actions not necessarily meant to increase shareholders’ values but that can benefit their community, the environment, or their employees, subsidiaries and suppliers.

To be registered as a benefit corporation in Idaho, a company needs to alter its articles of incorporation and prepare a benefit report that must be sent to shareholders every year and posted online. Ormseth said that making the switch to benefit corporation status can protect company leaders and boards if they make decisions based on criteria other than maximizing near-term company profits, which several companies in Idaho already do in some cases.

“A lot of regular corporations that aren’t benefit corporations or B Corps, their boards already consider more than just the short-term advantage of shareholders,” Ormseth said. “The legal justification for doing that, typically, is that it’s in the best long-term interest of the shareholder.”

Read “With law passed, companies can now declare public benefit,” published May 8, 2015. (Subscription required.)