Social Purpose CorporationsIn 2012 Washington State established a new category of business, the Social Purpose Corporation.
Under traditional corporate law, the Directors of a corporation are required to maximize the financial return to investors, regardless if this could have negative environmental or social effects. For example, a Company may invent a very effective water filter that could save millions of lives in developing countries. Then the Company receives two offers to buy the technology. One offer is very high from someone who intends to use the technology for industry, and not to help poor people. The other offer is lower from someone whose intends to use the technology for humanitarian goals. Under traditional corporate law, the Company is required to maximize the return to its investors and must take the higher offer, even though poor people will never benefit from the invention.
In a Social Purpose Corporation the Articles of Incorporation allow the Directors and Officers to make decisions that include non-financial criteria, such as improving environmental and/or social welfare. The major purpose is to protect the Directors from lawsuits by investors who think that they did not make as much profit as they think they should have. Potential investors will read the Articles before they invest, so they know the rules in advance.
Of course any SPC probably will try to maximize its profits and benefit its investors. At Hydrobee SPC, we strive to maximize profit for our investors and employees so we can bring our universal USB charging solution to the world. We know that “Sustainable Business” means not just making a profit, it means making a GOOD profit, so we can hire the best people, take chances and drive innovation and demand.