(a)  A benefit corporation shall prepare an annual benefit report including all of the following:

(1)  A narrative description of:

(i)  The ways in which the benefit corporation pursued general public benefit during the year and the extent to which general public benefit was created.

(ii)  Both:

(A)  The ways in which the benefit corporation pursued a specific public benefit that the articles of incorporation state it is the purpose of the benefit corporation to create; and

(B)  The extent to which that specific public benefit was created.

(iii)  Any circumstances that have hindered the creation by the benefit corporation of general public benefit or specific public benefit.

(iv)  The process and rationale for selecting or changing the third-party standard used to prepare the benefit report.

(2)  An assessment of the overall social and environmental performance of the benefit corporation against a third-party standard:

(i)  Applied consistently with any application of that standard in prior benefit reports; or

(ii)  Accompanied by an explanation of the reasons for:

(A)  Any inconsistent application; or

(B)  The change to that standard from the one used in the immediately prior report.

(3)  The name of the benefit director and the benefit officer, if any, and the address to which correspondence to each of them may be directed.

(4)  The compensation paid by the benefit corporation during the year to each director in the capacity of a director.

(5)  The statement of the benefit director described in § 7-5.3-8(c).

(6)  A statement of any connection between the organization that established the third-party standard, or its directors, officers, or any holder of five percent (5%) or more of the governance interests in the organization, and the benefit corporation or its directors, officers, or any holder of five percent (5%) or more of the outstanding shares of the benefit corporation, including any financial or governance relationship that might materially affect the credibility of the use of the third-party standard.

(7)  If the benefit corporation has dispensed with or restricted the discretion or powers of the board of directors, a description of:

(i)  The persons that exercise the powers, duties, and rights and who have the immunities of the board of directors; and

(ii)  The benefit director, as required by § 7-5.3-8(f).

Terms Used In Rhode Island General Laws 7-5.3-12

  • Benefit corporation: means a corporation for profit with purposes set forth in § 7-5. See Rhode Island General Laws 7-5.3-2
  • Benefit director: means either:

    (i)  The director designated as the benefit director of a benefit corporation under § 7-5. See Rhode Island General Laws 7-5.3-2

  • Benefit officer: means the individual, if any, designated as the benefit officer of a benefit corporation under § 7-5. See Rhode Island General Laws 7-5.3-2
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • General public benefit: means a material positive impact on society and the environment, taken as a whole, assessed against a third-party standard, from the business and operations of a benefit corporation. See Rhode Island General Laws 7-5.3-2
  • Specific public benefit: includes :

    (i)  Providing low-income or underserved individuals or communities with beneficial products or services;

    (ii)  Promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business;

    (iii)  Protecting or restoring the environment;

    (iv)  Improving human health;

    (v)  Promoting the arts, sciences, or advancement of knowledge;

    (vi)  Increasing the flow of capital to entities with a purpose to benefit society or the environment; and

    (vii)  Conferring any other particular benefit on society or the environment. See Rhode Island General Laws 7-5.3-2

  • Third-party standard: means a recognized standard for defining, reporting, and assessing corporate social and environmental performance that is:

    (i)  Comprehensive because it assesses the effect of the business and its operations upon the interests listed in § 7-5. See Rhode Island General Laws 7-5.3-2

(b)  If, during the year covered by a benefit report, a benefit director resigned from or refused to stand for reelection to the position of benefit director, or was removed from the position of benefit director, and the benefit director furnished the benefit corporation with any written correspondence concerning the circumstances surrounding the resignation, refusal, or removal, the benefit report shall include that correspondence as an exhibit.

(c)  Neither the benefit report nor the assessment of the performance of the benefit corporation in the benefit report required by subsection (a)(2) needs to be audited or certified by a third party.

History of Section.
P.L. 2013, ch. 487, § 1; P.L. 2013, ch. 500, § 1.