Bipartisan Support for Benefit Corp Law in Arizona

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The Arizona legislature is currently considering a bill that would block any Presidential executive order it deems unconstitutional. A few years ago, they passed a law allowing police to question anyone suspected of being an illegal immigrant. The Republican Party has controlled the governor’s office and both legislative chambers since 2009, and conspiracy theories are popular discussion topics in the State Capitol.

Yet in 2015, the Arizona Legislature also enacted a law allowing companies to organize as benefit corporations, which are required to pursue a social benefit and be good environmental stewards while they also make a profit. The laws passed with bipartisan support, according to Stuart Goodman, the lobbyist who led the campaign.

GoodmanR_0Seed Spot, a business incubator in Phoenix, hired Goodman to push a bill that was sponsored by a moderate Republican. “We had two messages,” he says. “One was that this law allows the private sector to provide services ordinarily provided by the public sector. Let’s say that a company wanted to provide meals to the elderly as its social benefit. That will reduce the burden on government.

“Our second argument was freedom of choice. This law protects entrepreneurs who want to pursue social and environmental benefits from shareholders who might sue them for not maximizing short-term profits.”

Support for the law was “a mixed bag,” says Goodman. “The most conservative and the most liberal legislators both opposed it.” Republican Carl Seel was against the bill because he thought it would attract liberals to Arizona, says Goodman. Democrat Debbie McCune Davis voted no because she thought it would be an excuse to further cut social services, and also because she thought corporations didn’t deserve any more legal protections than they already had.

Despite these objections, says Goodman, “A majority came together that was pragmatic and pro-business, and the governor agreed.”

The law has been in effect since January 2015. Five benefit corporations are currently active in Arizona, along with ten Certified B Corps, and more are on the way. “I just talked to a former customer who is considering changing his status,” says Adam Goodman, CEO of Goodmans Interior Structures (and Stuart’s cousin), a benefit corporation based in Phoenix. “People talk to me about it all the time.”

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