The Public Benefit of Benefit Corporations

Vaughan, Shannon K.; Arsneault, Shelly

doi:10.1017/s1049096517001391

Cited by 17 publications

(10 citation statements)

References 17 publications

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“…Further, research has explored the social role played by BCs at a macro-level by examining areas such as the implications of BCs' movement for public policy (Vaughan & Arsneault, 2018); the role of BCs in promoting a circular economy (Poponi, Colantoni, Cividino, & Mosconi, 2019); and the role of BCs in introducing more significant social commitment in critical economic sectors such as the pharmaceutical industry (e.g., Eiser & Field, 2016;Frood, 2017). BCs have also been recognized as a factor that can drive change in the economic system from the perspective of conceptual innovation (Wolf, 2018).…”

Section: Literature Reviewmentioning

confidence: 99%

Understanding the purpose of benefit corporations: an empirical study on the Italian case

Mion

Adaui

2020

Int J Corporate Soc Responsibility

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Rethinking the traditional understanding of organizational purpose appears to be necessary. A teleological paradigm shift seems to be on its way, changing the focus of attention from considering business organizations as instruments used to generate profits toward a more comprehensive understanding of their purpose and of the benefit they can create for society. Recently, new organizational entities have emerged, accompanied by the renewal of institutional frameworks, among them are benefit corporations. Italy was the first European country to introduce a legal framework to define the benefit corporation as a particular legal entity. The Italian law on the benefit corporations proposes the promotion of firms that pursue the generation of benefit in a responsible, sustainable, and transparent way and considering diverse stakeholders. This paper explores and describes the multidimensional understanding of benefit and purpose of Italian benefit corporations, utilizing qualitative and quantitative content analysis of 94 Italian benefit corporations' purpose declarations, and providing a deep insight into the purpose declared by benefit corporations. The research highlights a certain vagueness in public declarations of the purpose of benefit corporations, even though it is clear that they attempt to differentiate themselves from traditional businesses by focusing on social objectives more than on economic ones. Furthermore, normative compliance emerged, but further normative requirements seem to be needed to make more effective the transformative potentiality of benefit corporations and to avoid risks of opportunistic behaviors.

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Section: Literature Reviewmentioning

confidence: 99%

Understanding the purpose of benefit corporations: an empirical study on the Italian case

Mion

Adaui

2020

Int J Corporate Soc Responsibility

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“…This is followed by the presentation of findings of an early uptake study in Maryland that reviewed the corporate charters of newly-formed BCs and secondary sources in the first years after Maryland enacted its BC statutes. This allows an assessment of whether potential charities indeed chose BC status instead of the nonprofit form-the question raised by Vaughan and Arsneault (2018) and others (Smith 2014). I conclude with an outlook on where nonprofits and BCs could usefully intersect in the future.…”

Section: Introductionmentioning

confidence: 93%

Do Benefit Corporations Represent a Policy Threat to Nonprofits?

Toepler

2019

Nonprofit Policy Forum

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In the US and increasingly internationally as well, considerable efforts have been made in recent years to introduce new legal forms, such as the benefit corporation, at the local level as an additional structural option for social entrepreneurs. These efforts have been met with considerable apprehension on the part of nonprofit sector advocates, who perceive these new organizational forms as potential competition. This paper investigates whether the benefit corporation is in fact a likely competitive threat to nonprofits. Presenting the findings of an early uptake study, it reviews the early experience with the state-level introduction of the benefit corporation in Maryland, the first state to adopt the new legal form.

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“…The needs for BCs' transparency about their social impact derive from different factors that were highlighted by previous literature, and that is one of the critical points in early legislative experiences in the USA [19]. First, the notion of "benefit" is related to the public interest and, consequently, there is a link between BCs and public policy in order to guarantee (public) trust in these organizations [50]. To avoid any form of greenwashing and make BC an effective form of social business [51], in the USA, as in Italy, the legislation on BCs imposes forms of reporting about social impact.…”

Section: Benefit Corporations and The Need For Accountabilitymentioning

confidence: 99%

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

Mion

2020

Sustainability

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Benefit Corporations (BCs) were introduced in Italy by Law 28-12-2015 N. 208 based on the previous experience of the USA. BCs are hybrid organizations with a blended economic and social/environmental purpose and aim to generate a positive impact on employees, environment, communities, and other stakeholders in addition to profit-making. For BCs, accountability is crucial to achieve social legitimacy and to prove their positive impact on society. Italian BCs are obliged to prepare and publish a yearly impact report. The present research aimed to explore the impact reporting practices of Italian BCs and to evaluate the quality of the published reports. 47 impact reports were collected from 192 websites, and a qualitative content analysis was performed on these reports. Furthermore, an evaluation instrument was built to measure impact reporting quality and to understand which determinants affected the reporting quality. The study allowed understanding that impact reporting practice was at a very early stage of evolution. Furthermore, the analysis focused on the importance of an external standard for promoting reporting quality. The findings of the study contributed to the existing literature on BCs and on reporting quality and allowed some practical implications for managers, policymakers, and standard setters.

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The Public Benefit of Benefit Corporations

Cited by 17 publications

References 17 publications

Understanding the purpose of benefit corporations: an empirical study on the Italian case

Understanding the purpose of benefit corporations: an empirical study on the Italian case

Do Benefit Corporations Represent a Policy Threat to Nonprofits?

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

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