(Feb. 19) – The House Business, Labor & Economic & Workforce Development Committee gave the initial go-ahead today to a bill by Rep. Pete Lee (D-Colorado Springs) to allow corporations to purse the public good even if it means reduced profits.
Corporations have an overriding fiduciary duty: to maximize profits for their shareholders. HB13-1138 permits a corporation to become a “public benefit corporation,” with the freedom to pursue goals other than simple profit.
An existing corporation would need a two-thirds vote of its shareholders to amend its articles of incorporation to become a public benefit corporation.
“We should be encouraging the business community’s best instincts,” Rep. Lee said. “I know entrepreneurs who want to consider the best interests of their employees and communities, who want to benefit people and the planet as well as pursue profit. I seek to attract social impact investors to Colorado. This bill will do all of that.”
A 6-5 vote in committee sent the bill to the Appropriations Committee.