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54 Sw. L. Rev. 108 (2025)
Compensating a Public Benefit Corporation

handle is hein.journals/swulr54 and id is 116 raw text is: COMPENSATING A PUBLIC BENEFIT CORPORATION Sung Eun (Summer) Kim* I. INTRODUCTION At a time when more entrepreneurs desire to dedicate their time, talents, and resources to ventures that pursue social and environmental purpose alongside profit,' Professor Michael Dorff's Becoming a Public Benefit Corporation, (Becoming a PBC') provides a timely, important, and comprehensive overview of two business forms that facilitate such pursuits in the United States-benefit corporations and public benefit corporations.2 A company that is formed as a benefit corporation (BC) must specify in its charter the specific public benefit it seeks to advance, and a public benefit corporation (PBC) is the version of the BC that is offered in the state of Delaware (BCs and PBCs are collectively referred to here as BC/PBCs). Professor Dorff provides a balanced view on both the promises as well as the limitations of BC/PBCs. To begin with their strengths, BC/PBCs are subject to legal duties and requirements that can be used to signal an entity's legal commitment to consider the interests of stakeholders other than shareholders. Furthermore, the BC/PBC form ensures that these commitments are preserved even if the ownership of a BC/PBC changes hands.3 In addition, BC/PBCs are excellent purpose reinforcement tools.' BC/PBC statutes create an opportunity for boards of directors to identify, * Professor of Law, University of California, Irvine, School of Law. I am grateful to Cassidy Hunt (Harvard Law School, Class of2026) and Piper Hinson (Editor-in-Chief Southwestern Law Review 2024-25) for their outstanding research and editorial assistance and to Professor Michael Dorff and the other contributors to this symposium issue for inspiring new ideas on how our legal system can keep up with corporations' desires to serve the public benefit. 1. WORLD ECON. F., The State ofSocial Enterprise: A Review ofGlobal Data 2013-2023 4 (2024), https://www3.weforum.org/docs/WEFTheStateof SocialEnterprise_2024.pdf (reporting an estimated 10 million social enterprises globally, collectively generating around $2 trillion in annual revenue and creating nearly 200 million jobs). 2. MICHAEL B. DORFF, BECOMING A PUBLIC BENEFIT CORPORATION (2024) [hereinafter BECOMING A PBC]. 3. Id. at 2-3. 4. Id. at 5, 125 ([A]lthough the statutory mechanisms are imperfect enforcement tools ... they are excellent reinforcement tools.). 108