How Change Happens: The Benefit Corporation in the United States and Considerations for Australia

In Creating Corporate Sustainability. Gender as an Agent for Change, Beate Sjåfjell and Irene Lynch Fannon (eds), Cambridge University Press, 2018

University of Oslo Faculty of Law Research Paper No. 2018-13

Posted: 16 May 2018

See all articles by Victoria Schnure Baumfield

Victoria Schnure Baumfield

Bond University - School of Law; University of Queensland, T.C. Beirne School of Law

Date Written: May 16, 2018

Abstract

As social enterprise has gained in profile, there has been a proliferation of new hybrid corporate forms that combine the pursuit of both profits and social objectives, and the creator of the popular benefit corporation is currently lobbying to introduce ‘benefit companies’ in Australia. While they are well-intended, this chapter queries whether these new structures are ultimately just a sideshow to distract from the failure to reform expectations surrounding traditional corporations, which are often wrongly presented as inadequate to support socially responsible business practices. Might the spread of hybrids inadvertently serve to ghettoise expectations for socially beneficial and sustainable corporate behaviour? This chapter briefly describes the new structures that have emerged. It then argues that directors’ duties owed to the traditional corporation do not preclude the consideration of other stakeholders and that the arguments in favour of the hybrids skew our understanding of the traditional corporation and obscure the need for socially responsible conduct on the part of traditional corporations. The chapter finally argues against adopting a hybrid form in Australia.

Keywords: Social enterprise, hybrid form, benefit corporation, benefit company, Australia, stakeholders, social objective, corporate purpose, profit maximization, shareholder wealth maximization

Suggested Citation

Baumfield, Victoria Schnure, How Change Happens: The Benefit Corporation in the United States and Considerations for Australia (May 16, 2018). In Creating Corporate Sustainability. Gender as an Agent for Change, Beate Sjåfjell and Irene Lynch Fannon (eds), Cambridge University Press, 2018, University of Oslo Faculty of Law Research Paper No. 2018-13, Available at SSRN: https://ssrn.com/abstract=3179442

Victoria Schnure Baumfield (Contact Author)

Bond University - School of Law ( email )

Gold Coast, QLD 4229
Australia

University of Queensland, T.C. Beirne School of Law ( email )

St Lucia
Australia

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