Document Type
Article
Publication Title
Michigan Business & Entrepreneurial Law Review
Publication Date
2015
Abstract
Third-party standard providers for benefit corporations will likely acquire the same level of success as Institutional Shareholder Services (ISS). Consequently, the public should be leery of encountering the same concerns, specifically, a lack of transparency, including undefined analytic models, inaccurate and incomplete information, and conflicts of interest. Going forward, the public should also be especially mindful of standard-providing organizations that also sell consulting services. As more states pass benefit corporation legislation, it is imperative that these issues be addressed and that solutions be proposed. Lax and uneven implementation of the third-party standard could mean that benefit corporation regulation, despite being a noble cause, quickly becomes defunct or, worse, meaningless. To preserve the power of business to solve social and environmental problems, we must address the appropriateness of the option to choose a third-party standard, the absence of a benefit report verification process, and the lack of third-party standard accreditation.
Recommended Citation
Tammi S. Etheridge, Lessons from Institutional Shareholder Services: Governing Benefit Corporations' Third-Party Standard, 4 Mich. Bus. & Entrepreneurial L. Rev. 239 (2015).