Disruptive Innovation and the Global Emergence of Hybrid Corporate Legal Structures

European Company Law, Volume 11, Issue 2

University of Oslo Faculty of Law Research Paper No. 2014-16

13 Pages Posted: 9 Jul 2014 Last revised: 12 Jul 2014

See all articles by Carol Liao

Carol Liao

Peter A. Allard School of Law

Date Written: July 8, 2014

Abstract

There is considerable legal scholarship focused on reforming the shareholder primacy model of governance embodied within the modern day corporation. While these efforts are worthwhile and must continue, there are certain ideological and practical limitations that make true reformation of this model difficult. It is important, therefore, that in the midst of ongoing efforts, one does not lose sight of available alternatives.

This article promotes a novel perspective that does not spring from traditional-style efforts of corporate reform, but rather, on how a growing trend in corporate law may create 'disruptive innovations' in the marketplace and foster an environment where sustainable companies eventually become the norm. This trend is the global emergence of corporate hybrid legal structures that are blending both for-profit and non-profit legal characteristics in their governance design. Corporate social responsibility (CSR) is getting a facelift in the private sector. Large multinational corporations are still catching onto CSR, but the leaders at the forefront of the movement are transforming the concept of CSR into one of 'social innovation' and the integration of business concepts with social activism. The growth of the 'social enterprises', a definition with no legal meaning that commonly refers to either a for-profit corporation trying to do social good, or an enterprising non-profit organization, is beginning to generate statutory responses in several countries. Legislators are beginning to create corporations with legal features that support social enterprises. With correct strategic implementation, corporate hybrids have the potential to challenge the status quo and force mainstream corporations to change how they operate.

Keywords: Disruptive innovation; corporate governance; corporate law; social enterprises; social value; corporate social responsibility; for-profit corporation; non-profit organization

Suggested Citation

Liao, Carol, Disruptive Innovation and the Global Emergence of Hybrid Corporate Legal Structures (July 8, 2014). European Company Law, Volume 11, Issue 2; University of Oslo Faculty of Law Research Paper No. 2014-16. Available at SSRN: https://ssrn.com/abstract=2463583

Carol Liao (Contact Author)

Peter A. Allard School of Law ( email )

University of British Columbia
1822 East Mall
Vancouver, British Columbia V6T 1Z1
Canada

HOME PAGE: http://www.allard.ubc.ca/faculty-staff/carol-liao

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