BENEFIT CORPORATIONS BIPARTISAN SUPPORT NO COST ECONOMIC DEVELOPMENT

BENEFIT CORPORATIONS: - BIPARTISAN SUPPORT - NO COST ECONOMIC DEVELOPMENT

BI-PARTISAN SUPPORT Benefit corporation Iowa Legislators that legislation has received support: over a 90% aye vote � Bill Dotzler (S-D) from all floor votes � Brad Zaun (S-R) Voluntary business � Matt Mc. Coy (S-R) choice that expands the � Mark Lofgren (S-D) free market, so the � Chuck Holz (Rep – R) legislation is liked by both Democrats and Republicans. No cost economic development

NO COST ECONOMIC DEVELOPMENT Passing benefit corporation legislation can help create a no-cost economic development opportunity for states by: � creating pathways for a new market of social enterprises to scale � avenue for social impact investors to invest efficiently Benefit corporations produce an annual benefit report using a third party standard to benchmark their performance: � Investors and consumers can use this report to make informed financing and purchasing decisions

NO COST ECONOMIC DEVELOPMENT "Millennials will grow to 75% of the workforce by 2025, 77% say their “company’s purpose was part of the reason they chose to work there. ” -Deloitte Millennial Survey A survey of 200 academic studies found that "88% of reviewed sources find that companies with robust sustainability practices demonstrate better operational performance, which ultimately translates into cash flows, " and "80% of the reviewed studies demonstrate that prudent sustainability practices have a positive influence on investment performance. " - From the Stockholder to the Stakeholder “Strong governance, along with effective management of environmental and human capital factors, increases the likelihood that companies will perform over the long-term and manage risk effectively. ” - Cal. PERS 2013 Investment Beliefs

MISCONCEPTIONS Benefit Corporations receive special tax treatment: � A benefit corporation still must choose either C or S status � Not taxed any differently than other corporations Benefit Corporation legislation increases regulation: � Completely voluntary: similar to LLC or traditional corporation � It does not impact traditional corporations or impose additional requirements or regulation in any way, and benefit corporations do not have to be certified or audited by a third party

MISCONCEPTIONS CONT’D. Benefit Corporation legislation is left wing legislation: � False. The legislation specifically permits companies to include their specific mission in their articles of incorporation, which could focus on values of their choosing.