State approves law that will allow corporations to more easily promote the public good

? The Kansas House on Monday passed and sent to Gov. Sam Brownback a bill that would authorize forming corporations in Kansas that include as part of their mission providing some sort of social, charitable or environmental benefit.

Under the state’s current laws governing corporations, officers and directors have a duty to operate the company in a way that maximizes profits and share value, and they can be sued by shareholders for failing to carry out that duty.

The bill would set up a new class of for-profit businesses called “public benefit corporations,” or PBC’s, that would be shielded from such lawsuits as long as they operate the company responsibly, balancing the interests of shareholders with the other public benefits they pursue.

Examples of public benefit corporations organized in other states that already have such laws include Ben & Jerry’s, Patagonia and Kickstarter.

The House originally passed the bill in February, but the Senate put the contents of that bill into another bill. The final version of the bill passed the Senate 37-2 on May 2. It passed the House Tuesday, 121-0.

Passage of the corporation bill was the only action taken in the House Tuesday.