§ 33-1363 — Third-party standard. Preparation of annual benefit report.

(a) A benefit corporation shall select a third-party standard by which to assess such corporation's pursuit of a general public benefit and any specific public benefit. Selecting or changing a third-party standard shall require approval by (1) the greater of (A) a majority of all the directors in office when the action is taken, or (B) the number of directors required by the certificate of incorporation or bylaws of the benefit corporation to take action under this section, or (2) the vote or written consent of the shareholders required by the certificate of incorporation or bylaws of the benefit corporation to take action under this section. (b) A benefit corporation shall prepare an annual benefit report that includes each of the following: (1) A narrative description of (A) the ways in which the benefit corporation pursued a general public benefit during the year and the extent to which a general public benefit was created; (B) both (i) the ways in which the benefit corporation pursued any specific public benefit identified in the benefit corporation's certificate of incorporation, and (ii) the extent to which such specific public benefit was created; (C) any circumstances that have hindered the creation by the benefit corporation of a general public benefit or any specific public benefit; and (D) the process and rationale for selecting or changing the third-party standard used to prepare the benefit report; (2) An assessment of the overall social and environmental performance of the benefit corporation against a third-party standard (A) applied consistently with any application of that standard in prior benefit reports, or (B) accompanied by an explanation of the reasons for any inconsistent application or the change to that standard from the standard used in the most recent prior report; (3) The name of the benefit director and the benefit officer, if any, and the address to which correspondence to the benefit director or the benefit officer may be directed; (4) The compensation paid by the benefit corporation during the year to each director in his or her capacity as a director; (5) The opinion of the benefit director described in subsection (c) of section 33-1359 ; and (6) A statement of any connection between the organization that established the third-party standard, its directors or officers or any holder of five per cent or more of the voting power or capital interests in the organization, and the benefit corporation, its directors or officers or any holder of five per cent or more of the outstanding shares of the benefit corporation, including any financial or governance relationship that might materially affect the credibility of the use of the third-party standard. (c) If, during the year covered by a benefit report, a benefit director or benefit officer resigned from or refused to stand for reelection to the position of benefit director or benefit officer, or was removed from the position of benefit director or benefit officer, and the benefit director or benefit officer furnished the benefit corporation with a written statement or correspondence concerning the circumstances surrounding the resignation, refusal or removal, the benefit report shall include that statement or correspondence as an exhibit. (d) Neither the benefit report nor the assessment of the performance of the benefit corporation in the benefit report required by subdivision (2) of subsection (b) of this section shall be required to be audited or certified by the third-party standards provider.

Legislative History

(P.A. 14-217, S. 153.)