Purposes, Priorities and Accountability Under Social Business Structures: Resolving Ambiguities and Enhancing Adoption

Advances in Entrepreneurship, Firm Emergence, and Growth, Volume 19

25 Pages Posted: 22 Mar 2018 Last revised: 12 Apr 2018

See all articles by John E. Tyler

John E. Tyler

Ewing Marion Kauffman Foundation; Columbia University

Evan Absher

University of Missouri at Kansas City

Kathleen Garman

University of Missouri at Kansas City

Anthony J. Luppino

University of Missouri at Kansas City - School of Law

Date Written: December 16, 2017

Abstract

This article demonstrates that social business models do not meaningfully prioritize or impose accountability to “social good” over other purposes in ways that (a) best protect against owners changing their minds or entry of new owners with different priorities and (b) enable reliable accountability over time and across circumstances. This article further suggests a model that actually prioritizes “social good” and meaningful accountability to it. This article thus clarifies circumstances under which existing models might be most useful and facilitates broader and faster adoption as investors, entrepreneurs, employees, regulators, and others ensure shared, common understandings about purposes, priorities, and accountability.

Keywords: Hybrid business models, social good, benefit corporation, social purpose corporation, l3c, impact investing, social entrepreneurship, social enterprise, social business, mission related investing, corporate governance, business ethics

JEL Classification: K20, K23, K29, L20, L21, L22, L29, L30, L31, L33

Suggested Citation

Tyler, John E. and Absher, Evan and Garman, Kathleen and Luppino, Anthony J., Purposes, Priorities and Accountability Under Social Business Structures: Resolving Ambiguities and Enhancing Adoption (December 16, 2017). Advances in Entrepreneurship, Firm Emergence, and Growth, Volume 19, Available at SSRN: https://ssrn.com/abstract=3142324

John E. Tyler (Contact Author)

Ewing Marion Kauffman Foundation ( email )

4801 Rockhill Road
Kansas City, MO 64110-2046
United States
816-932-1293 (Phone)

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

Evan Absher

University of Missouri at Kansas City

5100 Rockhill Road
Kansas City, MO 64110-2499
United States

Kathleen Garman

University of Missouri at Kansas City

5100 Rockhill Road
Kansas City, MO 64110-2499
United States

Anthony J. Luppino

University of Missouri at Kansas City - School of Law ( email )

5100 Rockhill Road
Kansas City, MO 64110-2499
United States

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