Auros ([info]auros) wrote,
@ 2008-04-23 11:28:00
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Current mood: busy

AB 2944: the California Business Leadership and Innovation Statute
AB 2944, a bill written by Assemblyman Mark Leno (D - San Francisco) in collaboration with B Labs, would explicitly give permission to officers of corporations formed in California to consider, in their planning, other interests besides short-term financial benefit to shareholders. This would include considering harms to employees, communities and the environment, and the long-term interests of the company. This type of protection has already been extended to financial trustees, such as the managers of pension funds, partly in recognition of the fact that those funds that were considering issues other than short-term return were actually performing better anyways.

The bill is currently before the Assembly Judiciary Committee. The New Voice of Business (an aspiring competitor to the Chamber of Commerce, seeking to represent the true long-term interests of business owners) has a page about this bill, with some downloadable form-letters to send to the committee members.

If you're in Santa Clara, San Mateo, San Francisco, or Los Angeles county, you can visit GuideToGov.org to find all of your elected officials, to see if you're in one of the targeted districts. (The districts are all gerrymandered to pieces, so the below info is only approximate -- virtually every significant city in the state is carved up to have pieces in more than one district.) If you suspect you might be in somebody's district, you might try this page to get a detailed map of the relevant district. (Google the person's name with "assembly" and you'll find their district number.) Alternately, try googling "whatever county registrar" to find your registrar of voters, and then look for a link that will tell you info on your districts and representatives. Most registrars do have something like that.

The targets for these letters are:

  • Dave Jones from central Sacramento.

  • Van Tran, from an area that runs from Garden Grove to Costa Mesa.

  • Mark Leno, from San Francisco (for whom you should edit the letter to recognize that he's the author; he should be complimented/congratulated, rather than encouraged to support -- he obviously already does support his own bill).

  • Anthony Adams, Claremont.

  • Noreen Evans, Napa.

  • Mike Feuer, Beverly Hills.

  • Rick Keene, northeast CA (Lassen, Plumas, Butte, Sierra, Nevada, and Yuba counties).

  • Paul Krekorian, Glendale.

  • John Laird, Santa Cruz and Monterey.

  • Lloyd Levine, NW Los Angeles (Northridge, Van Nuys, etc).

  • Sally Lieber, South Bay (Mountain View, Sunnyvale, Santa Clara, Cupertino, Alviso).


If you have friends in the targeted districts, please forward the New Voice link to them, and have them send just the letter for their Assemblyperson. (I frankly consider sending a letter to somebody who isn't your representative a waste of time, and of paper if you fax or print. I think NVoB is making a mistake in suggesting that folks hit every member, even if they're from out-of-district. I told the director that last Saturday, but if that's what they're gonna do, that's what they're gonna do. *shrug*)

I'd guess, knowing reputations, that Evans, Laird, and Lieber will already be standing with Leno. The other Dems (Jones, Feuer, Krekorian, Levine) should be particularly targeted. It's virtually certain the Repubs will vote against. (Bear in mind that in the entire legislature, only one Republican, Shirley Horton of San Diego, voted for AB 32, despite polls showing that a majority of registered Republicans supported it. I know plenty of nice Republicans, none of whom hold any elected office in government or in their party structure. The GOPsters in the Leg are basically crazy; we really need to encourage more moderate Republicans to vote in primaries...)


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[info]plymouth
2008-04-23 09:58 pm UTC (link)
How messed up is our economic system that we have to pass a law to ALLOW this sort of good-corporate-citizenship? Isn't it that some corps do this already but they have to explicitly have it in their charter? It might be useful to include a bit of background on WHY this is important legislation.

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[info]auros
2008-04-23 10:13 pm UTC (link)
Currently, if you don't have stuff like this written into your corporate charter (B Labs is advocating for companies to do that) you can get sued by shareholders for turning in bad results if they believe you made decisions that were to the benefit of some other stakeholder at the expense of short-term profits. Shareholders can, of course, always exercise their right to vote out the current board and vote in people who will appoint executives that do things the way they want, but currently, the board and execs can be financially liable even to a minority of shareholders.

This sort of concern also applies critically to takeovers. If Vermont had a law like this in place back when Unilever was bidding to take over Ben and Jerry's, the board could've decided to accept a lower bid from Meadowbrook Capital (an SRI private equity fund), which would've better preserved the company's original ways of doing business.

Edited at 2008-04-23 10:13 pm UTC

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[info]xthread
2008-04-24 12:15 am UTC (link)
Hrrrm.... this strikes me as pretty creepy, fundamentally.. are you sure you want to kneecap the whole notion of shareholder lawsuits?

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[info]auros
2008-04-24 07:29 am UTC (link)
Breaking our corporate system's pathological focus on short-term gains is a necessity. So even if I thought this was particularly risky, I'd be willing to try it.

In any case, this in no way prevents shareholders from suing officers and boardmembers for taking actions that line the pockets of said officers and boardmembers. And this type of principle has been in place nationally for investment fund trustees since the mid-'90s, and in place for companies in a number of states since early this decade.

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