40 Pages Posted: 13 Dec 2010 Last revised: 11 Feb 2014
Date Written: December 13, 2010
Companies with social missions are frequently bought by larger, more conventional profit-seeking firms and just as frequently accused of “selling out.” Ben & Jerry’s Homemade Inc. is perhaps the leading example: its takeover by international conglomerate Unilever is an oft-repeated cautionary tale of the negative proclivities of the publicly-traded corporate form and profit-maximizing corporate law. Contrary to conventional wisdom, however, corporate law did not compel the sale, or sell-out, of Ben & Jerry’s. This familiar account omits a critical part of the narrative -- the company and its founders had established impressive anti-takeover defenses that, when pressed, the board declined to test. The Ben & Jerry’s story demonstrates that a well designed corporate structure can be suitable for social entrepreneurs seeking to pursue both profits and a social mission. Moreover, handwringing by progressives over the sale of social enterprise icons may be misguided, as such transactions may enable these firms to create more social value than they could independently.
Keywords: social enterprise, social entrepreneurship, hybrid organization, corporate law, legal form, organizational form, corporations, corporate social responsibility
JEL Classification: L2, L20
Suggested Citation: Suggested Citation
Page, Antony and Katz, Robert A., Freezing out Ben & Jerry: Corporate Law and the Sale of a Social Enterprise Icon (December 13, 2010). Vermont Law Review, Vol. 35, 2010 (symposium issue). Available at SSRN: https://ssrn.com/abstract=1724940