The Compliance Case for Social Enterprise

Michigan Business & Entrepreneurial Law Review, Forthcoming

42 Pages Posted: 25 Sep 2014

See all articles by Joseph W. Yockey

Joseph W. Yockey

University of Iowa College of Law

Date Written: September 23, 2014

Abstract

Social enterprises generate revenue to solve social, humanitarian, and ecological problems. Their products are not a means to the end of profits, but rather profits are a means to the end of their production. This dynamic presents many of the same corporate governance issues facing other for-profit firms, including legal compliance. I contend, however, that traditional strategies for corporate compliance are incongruent to the social enterprise’s unique normative framework. Specifically, traditional compliance theory, with its prioritization of shareholder interests, stands at odds with the social enterprise’s mission-driven purpose. Attention to this distinction is essential for developing effective compliance and enforcement policies in the future. Indeed, arguably the greatest feature of the social enterprise is its potential to harness organizational characteristics that inspire the values and culture most closely linked with ethical behavior — without resort to more costly or intrusive measures.

Keywords: Social enterprise, compliance, corporate social responsibility, corporate crime, corporate governance

Suggested Citation

Yockey, Joseph W., The Compliance Case for Social Enterprise (September 23, 2014). Michigan Business & Entrepreneurial Law Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2500484

Joseph W. Yockey (Contact Author)

University of Iowa College of Law ( email )

Boyd Law Building
Iowa City, IA 52242
United States

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