October 17, 2012

Bill Clark Quoted in Chronicle of Higher Education

Philadelphia partner Bill Clark was quoted in the Chronicle of Higher Education in an article titled, “Meet the New For-Profit: The Low Profit.”

The article discusses the sincerity and legitimacy of the established for-profit college business mantra, “doing well by doing good," which has been treated with considerable skepticism even before reports of abusive student-recruiting practices and questionable educational standards.

The article asks whether for-profit colleges organized as "benefit corporations" or "low-profit" limited-liability corporations are feasible; enterprises that place less emphasis on profits for the sake of their societal mission.

In a benefit corporation the owners would have fiduciary duties significantly broader than making a profit; there would also be some additional layers of accountability. In a benefit corporation, for example, the investors can take legal action if the company falls short of its public mission.

Bill, who has long been involved with drafting benefit corporation legislation and has championed the model nationally, said benefit corporations are “perfect for the for-profits."

A company that "would owe the same fiduciary duties to the students and faculty as they would to the shareholders," he says, would have a different approach "than a for-profit college where the directors are answerable principally to the shareholders."

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