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What goes in a public benefit corporation's benefit report?

Public benefitComplianceGovernance

A Delaware PBC's benefit report has four required parts. The objectives the board has established to promote the public benefit in the charter and the interests of the people the company affects. The standards the board adopted to measure progress toward those objectives. Factual information, based on those standards, about the company's success in meeting them. And the board's assessment of that success. It goes to the stockholders at least once every two years. It does not have to be published, audited, certified or filed with the state, and the statute says nothing about its length or form.

Setting it up at the start

The report is easy if the objectives and standards were set when the company became a PBC and tracked since, and a scramble if they were not. At formation or conversion the board should adopt, in a consent or minutes, three or four objectives that follow from the charter's benefit, and for each a measure the company can actually collect: units sold to the population the benefit serves, tons diverted, hours delivered, a survey score. Then those numbers go into the ordinary board reporting alongside revenue, so that when the two years are up the report is a summary of what the board has already seen.

Format and timing

Early-stage PBCs typically send a short letter or a few slides to stockholders, since the report is a stockholder document and there is no obligation to make it public. Larger companies fold it into a published impact report, sometimes structured on an outside framework. The clock runs from the date the company became a PBC, so a company that converted on March 1, 2025 owes its first report by March 1, 2027, and most tie the work to year-end reporting so the data is collected once. Many companies report annually because it is easier than remembering a biennial date.

Honesty

The report is a statement to investors, and a misleading one is a securities problem regardless of whether it was published. Say what did not work as well as what did. A report that only claims successes is less credible to the stockholders it is written for and more dangerous if the claims are ever tested.

Written by the lawyers who built Arabella. This is legal information, not legal advice for your situation, and reading it does not make us your lawyers. For a real dispute or a high-stakes decision, talk to a licensed attorney. More questions.