[Recursing]

> The PBC model is relatively new. Delaware, where most companies are incorporated, only adopted PBC legislation in 2013 and then changed provisions in 2020 to make the structure more enticing. Of the thousands of publicly traded companies in the US, fewer than 20 are PBCs. [...]

> However, it has proved popular with AI companies. Both Anthropic, the maker of the Claude AI tool, and Musk’s xAI are PBCs. One person close to xAI said this meant its probability of being sued was reduced if it did not act in accordance with the shareholders’ interests.

[...]

> “It is intentionally a way for incumbent management and directors to entrench themselves,” he said. “If you can convey the idea to people that you are a good enterprise, a morally safe enterprise and that comes with very little constraints, that has to be tempting to entrepreneurs.”

[yawnxyz]

That really goes against the original spirit of the PBC, which was the exact opposite: you should be able to fend off (not get sued by) evil profit-seeking shareholders, while pursuing the long-term vision.

But I guess these things goes both ways, and the path to hell is paved with good intentions.

We just can't have any nice things.

[hn_throwaway_99]

As the article says, the PBC structure has never been tested in court, therefore this is all speculation at this point, so it seems a bit premature to despair.

Yes, a big benefit of a PBC is that you're not only beholden to increasing shareholder value - that's obviously inherent to the PBC model, and I think it could be used for both "good and bad". At the same time, PBCs need to say what their "public benefit" is, and (my understanding is that) they have fiduciary responsibility to others besides just shareholders. This, I imagine they could also be sued by people saying they aren't fulfilling their public benefit mission. Point being, PBCs have pros and cons, and it will take some court cases to find out where the line truly lies.

[lotsofpulp]

I can’t imagine thinking agency risk would be reduced by the agent(s) declaring good intentions.

[yieldcrv]

Public Benefit Corporations (especially with the B-Corp certificate) is just a marketing strategy for gullible people uncomfortable with capitalism

But like with all entities, there is nothing inherent about them that would make the individuals within them act differently than a simple C-Corporation.

It all comes down to the bylaws.