Minnesota Legislature
SF 1153
as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am
Current Version - as introduced
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A bill for an act
relating to corporations; providing for incorporation of socially responsible
for-profit business corporations; proposing coding for new law as Minnesota
Statutes, chapter 304A.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
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[304A.01] CITATION.
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This chapter may be cited as the "Minnesota Responsible Business Corporation Act."
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Sec. 2.
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[304A.02] DEFINITIONS.
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new text begin Subdivision 1. new text end
new text begin Applicability. new text end
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For purposes of this chapter, the terms defined in this
section have the meanings given.
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new text begin Subd. 2. new text end
new text begin Public interest. new text end
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The "public interest" means the general public well-being
of present and future generations including, but not limited to, the economy, natural
environment, public health, public safety, human rights, educational and other human
developmental opportunities, and the general well-being of the local, state, national, or
world community.
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new text begin Subd. 3. new text end
new text begin Stakeholder. new text end
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"Stakeholder" means:
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(1) a shareholder;
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(2) an employee;
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(3) a customer;
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(4) a supplier; or
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(5) a creditor.
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Sec. 3.
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[304A.03] RELATIONSHIP TO OTHER LAW.
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Chapter 302A, including its definitions, applies to corporations incorporated or
governed under this chapter, except as otherwise provided in this chapter, or where chapter
302A conflicts with this chapter.
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Sec. 4.
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[304A.04] INCORPORATION.
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(a) A corporation may be incorporated under this chapter for any business purpose
or purposes, unless some other statute of this state requires incorporation for any of those
purposes under a different law. Unless otherwise provided in its articles, a corporation
has general business purposes.
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(b) The corporation's articles must provide that its business purpose or purposes
must be carried out in compliance with this chapter and with the corporation's social
responsibility purpose to which it commits itself under paragraph (e).
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(c) The secretary of state shall maintain its incorporation records in a manner that
clearly distinguishes corporations incorporated under this chapter.
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(d) A corporation incorporated under this chapter shall include as part of its
corporate name the phrase "socially responsible corporation," or its abbreviation "SRC."
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(e) The articles of incorporation of a corporation incorporated under this chapter
must state either:
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(1) the corporation's specific social responsibility goals or values regarding
promotion of either the public interest or the well-being of stakeholders other than
shareholders, or both;
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(2) one or more components of the public interest or of stakeholder interests other
than shareholders, to which the corporation will give special consideration; or
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(3) that the corporation will act in accordance with section 304A.05, subdivision 5.
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Sec. 5.
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[304A.05] STANDARD OF CONDUCT; DIRECTORS.
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new text begin Subdivision 1. new text end
new text begin Standard; liability. new text end
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(a) A director shall discharge the duties of
the position of director:
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(1) in good faith;
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(2) in a manner the director reasonably believes to be in the best interests of the
corporation, consistent with the considerations of subdivision 5; and
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(3) with the care an ordinarily prudent person in a like position would exercise
under similar circumstances.
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(b) A person who so performs those duties is not liable by reason of being or having
been a director of the corporation.
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(c) Nothing in this chapter creates liability to, or a cause of action in favor of, a
person other than the corporation or a shareholder, except as provided in section 304A.10.
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new text begin Subd. 2. new text end
new text begin Reliance. new text end
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(a) A director is entitled to rely on information, opinions,
reports, or statements, including financial statements and other financial data, in each case
prepared or presented by:
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(1) one or more officers or employees of the corporation whom the director
reasonably believes to be reliable and competent in the matters presented;
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(2) counsel, public accountants, or other persons as to matters that the director
reasonably believes are within the person's professional or expert competence; or
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(3) a committee of the board upon which the director does not serve, duly established
in accordance with section 302A.241, as to matters within its designated authority, if the
director reasonably believes the committee to merit confidence.
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(b) Paragraph (a) does not apply to a director who has knowledge concerning
the matter in question that makes the reliance otherwise permitted by paragraph (a)
unwarranted.
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new text begin Subd. 3. new text end
new text begin Presumption of assent; dissent. new text end
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A director who is present at a meeting of
the board when an action is approved by the affirmative vote of a majority of the directors
present is presumed to have assented to the action approved, unless the director:
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(1) objects at the beginning of the meeting to the transaction of business because
the meeting is not lawfully called or convened and does not participate thereafter in the
meeting, in which case the director shall not be considered to be present at the meeting
for any purpose of this chapter;
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(2) votes against the action at the meeting; or
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(3) is prohibited by section 302A.255 from voting on the action.
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new text begin Subd. 4. new text end
new text begin Elimination or limitation of liability. new text end
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A director's personal liability to the
corporation or its shareholders for monetary damages for breach of fiduciary duty as a
director may be eliminated or limited in the articles. The articles shall not eliminate or
limit the liability of a director:
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(1) for any breach of the director's duty of loyalty to the corporation or its
shareholders;
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(2) for acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law;
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(3) under section 80A.76 or 302A.559;
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(4) for any transaction from which the director derived an improper personal benefit;
or
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(5) for any act or omission occurring prior to the date when the provision in the
articles eliminating or limiting liability becomes effective.
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new text begin Subd. 5. new text end
new text begin Considerations. new text end
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(a) In discharging the duties of the position of director, a
director shall, in determining the best interests of the corporation, consider:
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(1) the interests of the corporation's shareholders, employees, customers, suppliers,
and creditors;
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(2) the economy of the state and nation, community and societal considerations,
including the public interest as defined in section 304A.02; and
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(3) the long-term as well as short-term interests of the corporation and its
stakeholders including the possibility that these interests may be best served by the
continued independence of the corporation.
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(b) A director is not required to give priority to any consideration referenced in
paragraph (a) over any other such consideration.
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new text begin Subd. 6. new text end
new text begin Applicability. new text end
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This section, and not section 302A.251, applies under
this chapter.
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Sec. 6.
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[304A.06] DIRECTORS; REPRESENTATION OF STAKEHOLDER
INTERESTS.
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(a) The directors of a corporation operating under this chapter must include directors
whose role as directors includes representation of, and advocacy for, the interests of the
corporation's employees and of the public interest as defined in section 304A.02.
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(b) At least 20 percent of the corporation's directors must represent and advocate
for the corporation's employees. These directors must be nominated and elected by the
employees, through a process specified in the bylaws.
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(c) At least 20 percent of the corporation's directors must represent and advocate
for the public interest. These directors must be elected by the other board members, after
seeking input from persons or groups representing the public interest.
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(d) If a corporation has only one or two directors, the director or directors may be
elected solely by the shareholders, but must comply with section 304A.05, subdivision 5.
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(e) If a corporation has three directors, the bylaws must provide that one director
must be elected to represent the employees or the public interest. That director must be
nominated and elected as provided in paragraph (b) or (c), whichever is relevant.
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(f) The designation of certain directors as representatives of and advocates for
employees or for the public interest does not affect the duty of other directors to consider
those interests, or the duty of the designated directors to consider the interests of other
stakeholders.
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Sec. 7.
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[304A.07] STANDARD OF CONDUCT; OFFICERS.
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(a) An officer shall discharge the duties of an office in good faith, in a manner the
officer reasonably believes to be in the best interests of the corporation, and with the care
an ordinarily prudent person in a like position would exercise under similar circumstances.
A person exercising the principal functions of an office or to whom some or all of the
duties and powers of an office are delegated pursuant to section 302A.351 is deemed an
officer for purposes of this section and sections 302A.467 and 302A.521.
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(b) In determining the best interests of the corporation, an officer must consider the
factors in section 304A.05, subdivision 5.
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(c) Nothing in this section creates liability to, or a cause of action in favor of, a
person other than the corporation or a shareholder, except as provided in section 304A.10.
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(d) This section, and not section 302A.361, applies under this chapter.
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Sec. 8.
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[304A.08] LAW OF AGENCY; APPLICABILITY LIMITED.
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The common law of agency does not apply to a corporation under this chapter, to
the extent that the common law of agency requires that the officers and directors act
solely in the interests of shareholders by maximizing the corporation's long-term or
short-term profits.
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Sec. 9.
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[304A.09] INPUT AND ACCOUNTABILITY TO CONSIDERATIONS
OTHER THAN SHAREHOLDER INTERESTS.
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new text begin Subdivision 1. new text end
new text begin Stakeholder impact. new text end
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The board shall provide opportunities for
advisory input from stakeholders other than shareholders, such as regular stakeholder
meetings scheduled by the board or a Web site or e-mail listserve provided by the
corporation for communication among those stakeholders and between those stakeholders
and the officers and directors.
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new text begin Subd. 2. new text end
new text begin Public interest reports. new text end
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If the corporation is a publicly held corporation,
as defined in section 302A.011, subdivision 40, the corporation shall produce and publish
an annual public interest report at the same time as it files its annual financial report
required under federal securities laws. The public interest report must summarize the
corporation's actions undertaken within the preceding year that benefit the public interest
and stakeholders other than shareholders and must describe how the corporation takes
into account those interests. A report that meets the requirements of the Global Reporting
Initiative satisfies this subdivision.
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new text begin Subd. 3. new text end
new text begin Education of officers' and directors' duties under this chapter. new text end
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The
corporation shall provide educational programs for its officers, directors, and other
employees regarding their special duties under this chapter to all of the corporation's
stakeholders and to the public interest. The corporation shall provide such education to
new officers, directors, and other employees at the earliest reasonable opportunity.
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Sec. 10.
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[304A.10] INTERVENTION OF ATTORNEY GENERAL.
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If a corporation organized under this chapter fails to comply with its self-designated
social responsibility commitment under section 304A.04, paragraph (e), or otherwise fails
to comply with this chapter, the attorney general may pursue remedies under either or both
of sections 8.31 and 316.02 against the corporation, its officers, or its directors.
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Sec. 11. new text begin EFFECTIVE DATE.
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Sections 1 to 10 are effective the day following final enactment.
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