A bill introduced in the General Assembly last week offers an option for corporate entities that want to offer more transparency.
The Certification of Adoption of Sustainability and Transparency Standards Act establishes a voluntary disclosure “to foster dialogue around sustainability and responsibility among participating Delaware business entities and their various stakeholders, according to a lengthy summary of the bill.
“The Act does not prescribe specific standards, measures of performance or criteria for evaluating performance. Rather, consistent with the enabling approach of Delaware business laws generally, the Act requires the governing body of each entity seeking certification under the Act to adopt principles, guidelines and standards to guide its business activities in a sustainable and responsible manner, as well as metrics for assessing whether it has met its objectives,” the summary stated.
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The Secretary of State’s certification is focused on information acknowledged by an authorized representative of the entity on its adoption of procedures to operate sustainably and responsibly and its commitment to disclose, at least annually, such procedures, the summary continued.
The decision to seek the certification is voluntary, although entities that misrepresent their activities are subject to civil or criminal penalties.
The legislation works off the trend toward companies setting goals in regard to environmental, gender equality and other areas.
The introduction comes after long-running concerns over Delaware LLCs being used by drug kingpins and other criminal enterprises as a cover for their activities.
Recently, a Delaware LLC was in the news as an alleged conduit for funds that a lawyer for President Donald Trump used in a settlement with an adult movie star. Trump denied the report.
Delaware officials have argued that forcing LLCs to require more information would simply move incorporation business to states like Nevada that would not require such disclosures.
Sponsor of the bill is Rep. Melanie George, D-Bear. Co-sponsors come from both political parties.
