HUNTSVILLE – Engineering consultant Torch Technologies announced today it will become a public benefit corporation. The move comes following a vote of its 1,200 employees-owners, who own 100% of the company.
Torch, a subsidiary of Starfish Holdings, released a statement saying it’s making the move to “more deeply embed the commitments we have always had into our formal legal structure.”
The vote to change, which was needed in a simple majority, came in a super-majority of 90% in favor for both shares and people, the statement said.
“We have operated in this manner since we were founded 21 years ago,” Starfish CEO and
Torch Technologies co-founder Bill Roark said. “This further substantiates our commitment to continue to focus on our employee-owners and the communities where we do business; this is what Don Holder and I had in mind when we started the company.”
The company said becoming a public benefit corporation is a significant and impactful
change in the legal language, which provides guidance into the governance of a corporation. As such, and in keeping with Torch’s core values and past practices, the vote to change was submitted to a vote.
“We are proud to be one of the first defense contractors in the nation to be a public benefit
corporation,” Torch President Brad Walker said.
“We take pride in leading the way in taking care of our employee-owners, customers, and communities,” Starfish President John Watson said.
Torch’s statement said, “The impact of this change is that we’ve now expanded the legal responsibilities of our Board of Directors. Our current and, more importantly, future Board of Directors will be required to consider what is best for our broader stakeholders – including our employee-owners, customers, and our communities. Additionally, our Board of Directors and management team will consider our long-term purpose when making strategic decisions.”
The company said four points summarize its commitment:
- Grow organization profitably for more than 100 years
- Create an environment that will provide financial stability for employee-owners,
allowing the focus to be on customers
- Support the growth and sustainment of employee-ownership concepts, policies,
- Support and enhance the well-being of the communities in which the company
Unlike conventional corporations whose primary interest is maximizing shareholder value, public benefit corporations are required to balance stakeholders’ interests, the interests of those who are involved and affected by the corporation (such as employees and customers), as well as the advancement of their intended public benefits such as supporting our community and the organizations that make it a better place to live.