B Corporations and the Delaware Stakeholder Provision Dilemma
During his 2007 commencement address at Harvard University, Bill Gates called on the graduates to invent ―a more creative capitalism‖ where ―we can stretch the reach of market forces so that more people can make a profit, or at least make a living, serving people who are suffering from the worst inequities.‖2 A number of entrepreneurs, including those that started online bookstore Better World Books (―BWB‖), are doing their best to create a more creative capitalism.3 BWB sells approximately 10,000 books a day and brought in $30 million in revenue in 2010.4 BWB sells its products to return a profit and to improve worldwide literacy directly. It increases literacy by funding book drives and collecting used books and textbooks (through a network of over 1,800 college campuses and partnerships with over 2,000 libraries nationwide) that it distributes to less-developed countries.5 Since its founding in 2003, the company has converted more than 53 million books into over $9.46 million in funding for literacy and education. In the process, it has diverted more than 26,000 tons of books from landfills.6
Companies like BWB that measure value creation as a combination of profits and impact on people, the environment, or both7 are emerging in increasing numbers. These entities, referred to collectively as social enterprises, are taking on roles that have traditionally been played by governmental and nonprofit entities. But, unlike their nonprofit counterparts, social enterprises seek simultaneously to have a positive impact on society and return a profit. Their idealistic pursuit is not without obstacles, however. Many social entrepreneurs (as the founders of social enterprises are called) claim that corporate law is ill-suited and outdated for their entities.8 Others find it hard to differentiate their socially oriented enterprises from companies that merely claim to benefit society, complicating their efforts to attract capital from socially oriented investors.