In searching for a good explanation for the concept of constituency statutes I came across an excellent law review article mapping the relationship between corporate law and social innovation principles by Anthony Bisconti titled, “The Double Bottom Line: Can Constituency Statutes Protect Socially Responsible Corporations Stuck in Revlon Land?” (Loyola Law Review, 2009)
So, what is a constituency statute?
A constituency statute, also called a stakeholder statute, allows corporate directors to consider non-shareholder interests when making business decisions.
Have all states passed constituency statutes?
No, but a majority of states have. As of 2009 (when Bisconti published his law review article) 32 states had passed some form of constituency statute.
Which states have enacted constituency statutes?
As listed in footnote 13, the following states have constituency statutes:
- New Jersey
- New Mexico
- New York
- North Dakota
- Rhode Island
- South Dakota