Category Archives: sounds right

hybrid companies are here

I was excited to learn that California just adopted a statue allowing for flexible-purpose corporations. I know — laws, corporations, California — chug that extra shot of espresso and see if you can muster up the mental energy. But here’s the deal. Hybrid corporations are blends of non-profit and for-profit institutions, and what you need to know is that these new companies are not required to maximize their profits. Which means company officers and boards may now use financial gains to pursue a social mission without risking shareholder retaliation.* Let’s hope it means grocery stores and bank branches in urban dead zones, and more and better health care for those without, like I wrote about in House of Hope and Fear.

My guess is that lots of folks out there aren’t in the game just for the money but would love for their work to make a real contribution to the places where they live. That’s what makes this development so interesting and exciting.

*For-profit corporations are required by law to maximize profits for their shareholders.

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