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An Early Report on Benefit Reports

33 Pages Posted: 30 Oct 2015  

J. Haskell Murray

Belmont University - College of Business Administration; Belmont University - Massey School of Business

Date Written: October 28, 2015

Abstract

Benefit corporation proponents argue that the new social enterprise entity form “meets higher standards of corporate purpose, accountability, and transparency.” This Article analyzes the transparency claim by examining hand-collected benefit report data and the substantive statutory reporting requirements. Data from early benefit corporations shows an abysmal benefit report compliance rate (below ten percent), drawing into question the claims about heightened transparency. This Article also provides reasons to doubt the efficacy of the current substantive reporting requirements due to the lack of specificity and lack of effective enforcement mechanisms in most states’ benefit corporation statutes. This Article explains how policy, theory, and now early data, all point to significant deficiencies in the benefit reporting framework. Finally, this Article concludes with suggestions to strengthen the benefit corporation reporting requirements, increase compliance rates, and encourage benefit corporation transparency.

Keywords: social enterprise, social entrepreneurship, benefit corporations, benefit reports, B Lab, third-party standards

JEL Classification: K20, K22, M13, M14

Suggested Citation

Murray, J. Haskell, An Early Report on Benefit Reports (October 28, 2015). West Virginia Law Review, Vol. 118, No. 25, 2015. Available at SSRN: https://ssrn.com/abstract=2682709

J. Haskell Murray (Contact Author)

Belmont University - College of Business Administration ( email )

United States

Belmont University - Massey School of Business ( email )

1900 Belmont Blvd.
Nashville, TN 37212-3757
United States

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