Putting Benefit Corporation Statutes into Context by Putting Context into the Statutes
Business Lawyer, Volume 76, Winter/Spring Issue (Forthcoming)
36 Pages Posted: 17 Jul 2020
Date Written: July 10, 2020
Ever since Adam Smith described the efficiency of markets in an age where freedom and property rights were coming to be seen as key elements of the good society, capitalism has honored the concept that capital return at individual enterprises is a good heuristic for their social return. In a complex and interdependent global economy, however, that concept is being challenged, as many question whether the costs of unfettered profit seeking outweigh its benefits. This has led some to challenge the utility of the shareholder primacy doctrine, and others to challenge the utility of capitalism itself. This article argues that benefit corporation law represents an important opportunity to establish a better set of ground rules for capitalism that would preserve the capital allocation function of markets while addressing the negative social and environmental impacts that have become associated with capitalism.
Keywords: Corporation law, benefit corporations, shareholder primacy
JEL Classification: K22, P12
Suggested Citation: Suggested Citation