Massachusetts General Laws ch. 156E sec. 11 – Benefit director; powers and duties; election and removal annual shareholder’s report; non-liability
Section 11. (a) The board of directors of a benefit corporation shall include 1 director who shall:
Terms Used In Massachusetts General Laws ch. 156E sec. 11
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
(1) be designated the benefit director; and
(2) have, in addition to the powers, duties, rights and immunities of the other directors of the benefit corporation, the powers, duties, rights and immunities provided in this chapter.
(b) The benefit director shall be elected, and may be removed, in the manner provided under chapter 156D and shall be an individual who is independent. The benefit director may serve as the benefit officer at the same time as serving as the benefit director. The articles of organization, bylaws or shareholder agreement of a benefit corporation may prescribe additional qualifications of the benefit director consistent with this section.
(c) The benefit director shall prepare and the benefit corporation shall include in the annual shareholder’s report the opinion of the benefit director on the following:
(1) whether the benefit corporation acted in accordance with its general public benefit and any specific public benefit purpose in all material respects during the period covered by the report;
(2) whether the directors and officers complied with subsection (a) of section 10 and subsection (a) of section 12;
(3) whether, in the opinion of the benefit director, the benefit corporation or its directors or officers failed to comply with subsection (b) and, if so, a description of the ways in which the benefit corporation or its directors or officers failed to comply; and
(4) what impact the corporation’s status as a benefit corporation is having on its business, including client or consumer opinion, return on investment, impact on shareholders and impact on employees.
(d) The action or inaction of an individual in the capacity of a benefit director shall constitute, for all purposes, an action or inaction of that individual in the capacity of a director of the benefit corporation.
(e)(1) A shareholder agreement of a benefit corporation adopted under subsection (a) of section 7.32 of chapter 156D shall provide that the persons or shareholders who perform the duties of the board of directors shall include a person with the powers, duties, rights and immunities of a benefit director specified under subsection (d) of section 10.).
(2) A person that exercises 1 or more of the powers, duties or rights of a benefit director under this subsection shall:
(i) not be required to be independent of the benefit corporation;
(ii) have the immunities of a benefit director;
(iiiiv) not be subject to the procedures for election or removal of directors in chapter 156D unless the person is also a director of the benefit corporation or the shareholder agreement makes those procedures applicable; and.
(iv) may share the powers, duties and rights of a benefit director with 1 or more other persons.
(f) The benefit director of a professional corporation shall not be required to be independent.
(g) Regardless of whether the bylaws of a benefit corporation include a provision eliminating or limiting the personal liability of directors authorized by chapter 156D, a benefit director shall not be personally liable for an act or omission in the capacity of a benefit director unless the act or omission constitutes self-dealing, willful and intentional misconduct or a knowing violation of the law.