(a)  The board of directors of a benefit corporation that is a publicly traded corporation shall, and the board of any other benefit corporation may, include a director who:

(1)  Shall be designated the benefit director; and

(2)  Shall have, in addition to the powers, duties, rights, and immunities of the other directors of the benefit corporation, the powers, duties, rights, and immunities provided in this chapter.

Terms Used In Rhode Island General Laws 7-5.3-8

  • 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
  • Independent: means having no material relationship with a benefit corporation or a subsidiary of the benefit corporation. See Rhode Island General Laws 7-5.3-2
  • person: may be construed to extend to and include co-partnerships and bodies corporate and politic. See Rhode Island General Laws 43-3-6
  • Publicly traded corporation: means a corporation that has shares listed on a national securities exchange or traded in a market maintained by one or more members of a national securities association. 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

(b)  The benefit director shall be elected, and may be removed, in the manner provided by chapter 1.2 of this title. Except as provided in subsections (f) and (g), the benefit director shall be an individual who is independent. The benefit director may serve as the benefit officer at the same time as serving as the benefit director. The articles of incorporation or bylaws of a benefit corporation may prescribe additional qualifications of the benefit director not inconsistent with this subsection.

(c)  The benefit director shall prepare, and the benefit corporation shall include in the annual benefit report to shareholders required by § 7-5.3-12, the opinion of the benefit director on all of the following:

(1)  Whether the benefit corporation acted in accordance with its general public benefit purpose and any specific public benefit purpose in all material respects during the period covered by the report.

(2)  Whether the directors and officers complied with §§ 7-5.3-7(a) and 7-5.3-9(a), respectively.

(3)  If, in the opinion of the benefit director, the benefit corporation or its directors or officers failed to act or comply in the manner described in subsections (c)(1) and (c)(2), a description of the ways in which the benefit corporation or its directors or officers failed to act or comply.

(d)  The act or inaction of an individual in the capacity of a benefit director shall constitute for all purposes an act or inaction of that individual in the capacity of a director of the benefit corporation.

(e)  Regardless of whether the articles of incorporation of a benefit corporation include a provision eliminating or limiting the personal liability of directors authorized by § 7-1.2-202(b)(3), a benefit director shall not be personally liable for an act or omission in the capacity of a benefit director unless the act or omission constitutes self-dealing, willful misconduct, or a knowing violation of law.

(f)  If the articles of incorporation of a benefit corporation provide that the powers and duties conferred or imposed upon the board of directors shall be exercised or performed by a person other than the directors as permitted by § 7-1.2-801(a), the articles must provide that the persons or shareholders who perform the duties of the board of directors include a person with the powers, duties, rights and immunities of a benefit director. A person that exercises one or more of the powers, duties, or rights of a benefit director under this subsection:

(1)  Does not need to be independent of the benefit corporation;

(2)  Shall have the immunities of a benefit director; and

(3)  May share the powers, duties, and rights of a benefit director with one or more other persons.

(g)  The benefit director of a professional corporation or consumer cooperative does not need to be independent.

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