SB 739
Creating Protecting Shareholders Act
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Sign in to take action- Introduced
- Passed Senate
- Passed House of Delegates
- To Governor
- Became Law
Bill overview
Senate Bill 739 aims to establish standards for determining breaches of fiduciary duty by corporate directors and officers in West Virginia. The bill defines key terms like ‘diversity, equity, and inclusion’ and ‘environmental, social, and governance’ to specifically exclude certain practices when evaluating a director’s or officer’s actions. It asserts that prioritizing ESG factors over financial returns constitutes a potential breach of fiduciary duty. This legislation seeks to clarify the legal responsibilities of corporate leadership regarding shareholder interests.
Key provisions
- Defines ‘diversity, equity, and inclusion’ to exclude practices that promote discrimination or preferential treatment based on protected characteristics.
- Defines ‘environmental, social, and governance’ as a framework for non-financial business considerations.
- Establishes that prioritizing ESG factors over financial returns can be considered a breach of fiduciary duty.
- Creates new sections in the West Virginia Code related to the Protecting Shareholders Act.
- Specifies that compliance with court orders or laws related to diversity, equity, and inclusion is not considered a breach.
- Outlines the meaning of ‘pecuniary interest’ as relating to financial risk and return.
- Establishes a prima facie case for breach of fiduciary duty when ESG priorities outweigh financial considerations.
Who is affected
- Corporate directors and officers
- Shareholders
- West Virginia Corporations
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