| Notes |
With some opposition from the Business Law Section of the California Bar and the California Chamber of Commerce, Gov. Arnold Schwarzenegger vetoed the bill along ith 92 other pieces of legislation during a standoff with the assembly over budgetary concerns. However, other business groups, including the Silicon Valley Leadership Group, the Bay Area Council and the San Francisco Chamber all supported the bill along with hundreds of other individual businesses—and the governor wasn’t wholly opposed either. Out of 92 pieces of legislation, only AB 2944 caught his attention long enough to earn a note of encouragement. “While I have concerns with the approach taken with this bill, I am interested in many of the issues raised in support of this measure,” he wrote. “California should be at the forefront of all states in considering alternative models of corporate governance for the new millennium.”Many read this to mean, “Great idea, wrong implementation—bring me the right implementation and I’ll sign it.”“The problem with AB 2944 was that it was playing around the edges of an existing corporate form and thus inherently had grey areas and conflicts with that form, particularly around questions of the duties of directors in the case of a sale of business,” says B Lab co-founder Andrew Kassoy.The new legislation should allay the concerns of opponents of AB 2944 that it could lead to legislation or regulation requiring all corporations to take more than financial interests into account.“This new approach is enabling rather than prescriptive; it won’t tell people how to do business, but it will allow them to have a little more freedom to describe their broader intentions right in their charter,” explains Jeff Mendelsohn, CEO of New Leaf Paper, a Certified B Corp and co-leader of the Business Working Group vetting drafts of the new code. “One of the great things that emerged from AB 2944 is this consensus from all sides that a new corporate form is the best alternative,” Kassoy says. |