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Comment by diggan | Hacker News Reader

First sentence is "Purism is a Social Purpose Corporation (SPC), which means we put social good above exploiting people". I've never heard of a SPC before (probably because I'm not from the US) so had to look it up. It seems it's still a for-profit corporation, just that it "enables, but does not require, considering social or environmental issues in decision making".

Which means that "which means we put social good above exploiting people" should really be "which means we can put social good above exploiting people" as it's not a requirement.

So, what's the purpose of a SPC instead of just a for-profit company? A for-profit can also consider social and environmental issues, AFAIK.

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My layman's understanding is that it allows managers to choose their stated ethics over profits. Traditionally, investors could sue the company for not pursuing above all else.

Those cases are almost always dismissed summarily, unless the plaintiff can demonstrate fraud or other kinds of bad faith. The "Business Judgement Rule" [0] requires courts to give a very wide latitude to the officers of a corporation.

The idea that "fiduciary duty" requires directors to pursue profit "above all else" is flatly false, and has led to untold amounts of misunderstanding and meaningless noise since whichever fool monkey first uttered it.

[0] https://en.wikipedia.org/wiki/Business_judgment_rule

Seems quite similar to Public-benefit Corporations, though with a looser set of requirements in the states that permit SPCs: https://en.wikipedia.org/wiki/Public-benefit_corporation

Above commenters are correct, in the US you have to have a special designation to consider a values-based mission as more important than providing value to shareholders.

Right at the root of something very fundamentally wrong about our way of conceiving of/enforcing how business is done.

With "normal" corporations, shareholders can sue if business decisions are not made to maximize shareholder profit.

Shareholders can sue anytime, for any reason, or none at all.

What matters is whether they can win, or cost enough that you have to settle. It appears that shareholders have not had much luck with such gambits.

So this is really more marketing phenomenon: "we won't be as bad as FAGAM", and we rely on the people who chose to work there to keep it honest.

That can work as long as they don't get too big, or too cozy.

Cautionary examples include the American Cancer Society (wholly lost) and the Red Cross (mismanaged).

Here you can read what exactly Purism specified as its social purpose: https://puri.sm/about/social-purpose/

Fiduciary obligations perhaps? The administrator of a corporation has legal obligations to its shareholders. Maybe an SPC can skirt those.

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