When the first benefit corporation statutes were enacted, the legislation was welcomed with cautious applause. Proponents hailed the move as a step in the right direction towards conscious capitalism, while others expressed cautious optimism. Skeptics said main stream investors would never accept a departure from the first law of the corporate rulebook to maximize shareholder value, and would certainly never be willing to share the spotlight with other stakeholders.
The skeptics are now learning to never say never. Laureate Education Inc. has recently filed a registration with the United States Securities Exchange Commission for an initial public offering. The company is a Delaware Public Benefit Corporation. Laureate is also a B Corporation, having completed the rigorous assessment and made the grade to certify as a B.
The corporation’s stated public benefit is to produce a positive effect (or a reduction of negative effects) for society and persons by offering diverse education programs online and on premises in the communities that they serve. The initial public offering is being underwritten by some of Wall Street’s most prestigious names. Even more striking is that Laureate Education is a portfolio company of KKR, the private equity behemoth. With KKR standing behind this IPO, there are bound to be many interested investors.
The underwriters as well as the company’s financial sponsors have taken the position that investing in a benefit corporation is, at the end of the day, no different from investing in a traditional corporation. When the IPO closes, Laureate Education Inc. will likely become the first publicly traded public benefit corporation. Once the first successful IPO of a benefit corporation occurs, who knows how many others will follow? Perhaps the long-held proposition of the social entrepreneurship community that businesses can do well and do good at the same time will finally be fulfilled.
