The Benefit Corporation: Corporate Governance and the For‐Profit Social Entrepreneur

18 Pages Posted: 3 Dec 2014

See all articles by Thomas A. Hemphill

Thomas A. Hemphill

George Washington University - Department of Strategic Management & Public Policy

Francine Cullari

University of Michigan at Flint - School of Management

Date Written: Winter 2014

Abstract

The adoption by 19 states and the District of Columbia of a new variant of the business corporation form - known as the benefit corporation - presents several issues for legislatures, for entrepreneurs electing to organize as benefit corporations, for existing corporations that are converting to the new form, and for the stakeholders (other than shareholders) who are intended to be considered in benefit corporation governance. The article presents the history and structure of the new business form and a discussion of what has become its predecessor - the constituency statute. The model benefit corporation statute provisions are reviewed, which many states have adopted in toto. The authors address the obstacles that should be overcome by legislatures, businesses, and stakeholders before further legislative adoptions occur, as well as considerations for effective implementation by government, corporations, and stakeholders under existing and proposed variations of the statute.

Suggested Citation

Hemphill, Thomas Albert and Cullari, Francine, The Benefit Corporation: Corporate Governance and the For‐Profit Social Entrepreneur (Winter 2014). Business and Society Review, Vol. 119, Issue 4, pp. 519-536, 2014, Available at SSRN: https://ssrn.com/abstract=2533269 or http://dx.doi.org/10.1111/basr.12044

Thomas Albert Hemphill (Contact Author)

George Washington University - Department of Strategic Management & Public Policy ( email )

Washington, DC 20052
United States

Francine Cullari

University of Michigan at Flint - School of Management ( email )

303 E. Kearsley Street
Flint, MI 48502
United States

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