Governance and accountability models in Italian certified benefit corporations

Abstract

Benefit corporations institutionalize a new hybrid corporate form of business that allows for both profit and social objectives. Benefit corporations are traditional corporations with modified obligations; they commit to produce a benefit or purpose on top of their for‐profit motive, and they voluntarily bind to higher accountability and transparency standards. The aim of this paper is to shed new light on the governance and accountability procedures of certified benefit corporations (CBCs) in Italy since Italy was the first country after the United States to introduce the Società Benefit Law in 2016. Namely, this work explores how CBCs integrate benefit‐driven indicators into their structure, providing a renewed governance framework. To achieve this goal, a pilot case was conducted and 12 cross‐sector in‐depth interviews were performed with top management in seven Italian CBCs and triangulated with structured documents. What emerged from the findings is that there is a shift in the models of corporate governance where non‐profits are entering the for‐profit sector and that for‐profits are broadening their mission to include social and environmental goals. This extends the objectives of traditional forms of business to incorporate welfare objectives.

Best of the world or better for the world? A systematic literature review on benefit corporations and certified B corporations contribution to sustainable development

“…Europe has 23.6% of the B Corps in the world. Papers related to Italian cases are the majority, concentrated among few authors (e.g., Gazzola et al, 2019; Nigri et al, 2020a; Sciarelli et al, 2020). There is an expressive number of B Corps from South America (483), compared to Asia (106), Central America (58), and Africa (44).…”

“…Other authors address the BC legal model positively, perceiving potential gains to be derived from it (e.g., Hiller, 2013; Kurland, 2017; Nigri et al, 2020a). Through the lens of CSR factors, one study concludes that the BC legal model fits into an integrated framework of CSR (Hiller, 2013).…”

“…An exploratory case study of Italian BCs reports that BIA indicators and accountability mechanisms are used to support top‐management team decisions, allowing the company to evaluate where it is and where it wants to be (Nigri et al, 2020a). A longitudinal study in one of the companies highlights the presence of virtuous‐leadership characteristics (Nigri et al, 2020b).…”

Effect of B Corp Certification on Short-Term Growth: European Evidence

“…This stamp lends credibility towards stakeholders and provides the opportunity to network with like-minded businesses [2]. This form of certification would positively affect accountability and corporate governance [42] and the BIA tool is used to integrate sustainability into the day-to-day decision-making [43]. Harjoto et al [37] conclude that B Corp certification is a way of companies to respond to high competition.…”

Organizations with Impact? A Study on Italian Benefit Corporations Reporting Practices and Reporting Quality

“…Besides, Mion and Loza Adaui explored purpose declarations of Italian BCs and showed some drivers and contents of the "benefit" pursued by these firms [47]. More studies analyzed Italian certified B-Corps to explore their business models and how public interests are combined with private/economic interests [48,49].…”