Life sciences cloud software firm Veeva Systems this afternoon said it will convert from a C Corp. to a public benefit corporation, or PBC, a move that changes its corporate charter to reflect a legal obligation to serve not just shareholders but also employees and customers.
"With today's shareholder approval, Veeva will become a public benefit corporation on Feb. 1, 2021, making it the first publicly traded company and largest-ever to convert to a PBC," the company said in a press release.
Veeva joins publicly traded Lemonade, the insurance firm that claims to be reinventing the insurance industry, which came public last year as a PBC; and privately held Ben & Jerry's Homemade, the ice cream company.
Veeva proposed the move back in September, and it was put to a vote of shareholders, and 99% of shareholders voted yes to the conversion, said Veeva.
While the move sounds similar to some commitments about environmentally -sustainable growth have become popular, it is somewhat different in that it is a formal, legal change in the type of incorporation from C Corp to PBC.
In an email to ZDNet, Veeva explained in prepared remarks that PBCs are connected to the idea of stakeholder capitalism, in which "corporations consider the broader impact they have beyond just shareholders."
"But as a PBC, Veeva is taking things a major step further," the company said, "by changing its articles of incorporation and making it their legal duty to balance the interests of customers, employees, partners, and shareholders – all stakeholders materially affected by the company.
"Without this formal change, corporations still only have one legal duty: maximize shareholder profits."
Veeva shares were unchanged in late trading at $282.