Introducing the legal requirement for Certified
B Corporations in Australia
A new accountability for stakeholder governance
For Certified B Corporations around the world, the legal requirement is a critical part of accountability. It sits alongside a B Corporation's social and environmental performance and commitment to transparency.
We started exploring the benefit company model in Australia in 2012. We're excited to announce we can meet the goals of the model without the legislative reform. In 2020 we have a new pathway for making this important commitment in Australia.
The importance of stakeholder governance
The B Corp legal requirement is a core element of certification demonstrating that all B Corps – no matter where they are in the world – share a commitment to pursue profit and purpose. The legal requirement demonstrates that companies hold themselves to a higher standard of accountability for their decisions. Companies commit to consider the impact of their decisions on all stakeholders – employees, customers, suppliers, shareholders, community, and the environment.
The legal requirement helps companies protect mission through capital raises and leadership changes, and aligns investors (and potential investors), directors, founders and management.
The B Corp legal requirement in Australia
In Australia, a company can meet the B Corp legal requirement by amending its company constitution - or governing documents for other eligible forms - to include the legal requirement language.
Australian law permits a company to amend its constitution to set out its objects,1 which means that a company can include a purpose in its constitution.
Before making this change, we recommend seeking legal advice for your specific circumstances, particularly if you are a public company or have complex shareholdings.
1 Corporations Act 2001 (Cth) s 125(2).
Wondering when you need to make this change?
As of 1 September 2020, Certified B Corps have until their next recertification or March 2022 - whichever is later - to make the amendment.
Aspiring B Corps have 12 months from certification to make the amendment.
Check your recertification date
Thank you to MinterEllison for providing expert guidance and support in developing the new legal requirement in Australia.
Resources to meet the legal requirement
Our legal partners have compiled resources to make meeting the legal requirement as smooth as possible.
B Lab Australia & New Zealand recommends seeking legal advice before making changes to your constitution.
For B Corps, a commitment to purpose is central to your certification. But what does stakeholder governance and the Declaration of Interdependence look like in practice?
Watch this conversation featuring Geoff Manchester from Intrepid, Tim O'Brien from Hatched, and Kristy Dixon from Marque Lawyers to explore what good governance looks like in everyday business.
Bringing the legal requirement to life
FAQs about the legal requirement
Explore these answers to our frequently asked questions.
Where to get advice
If you need help with the changes, these B Corp law firms are offering an initial, obligation-free half hour consult to answer questions or discuss any tailored assistance.
Have questions about the legal requirement?
Join us with our legal partners for office hours on 29 September and 1 October.
"Companies and investors need to go beyond nice statements of purpose by making themselves legally accountable to create value for society."
Co-Founder, B Lab