Dual-Investor Theory and the Case for Benefit Corporations

Benefit corporations, whose chartered mission includes attending to specific and general social benefits, are sometimes criticized as monstrous hybrids trying to serve two incompatible purposes. Dual-Investor Theory, which regards society as an investor in every business venture (since the knowledge...

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Bibliographic Details
Published in:Business & professional ethics journal 2016-04, Vol.35 (1), p.51-72
Main Author: Schlossberger, Eugene
Format: Article
Language:English
Subjects:
Business ethics
Capital investments
Corporate profits
Corporate regulation
Corporate responsibility
Corporations
Investors
Public benefit corporations
Shareholders
Stakeholders
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Summary:Benefit corporations, whose chartered mission includes attending to specific and general social benefits, are sometimes criticized as monstrous hybrids trying to serve two incompatible purposes. Dual-Investor Theory, which regards society as an investor in every business venture (since the knowledge base, infrastructure, etc. that society provides constitute a kind of capital), answers this objection by providing a natural and compelling rationale for benefit corporations. Several other objections to benefit corporations are articulated and addressed, including the problems of greenwashing and mission drift; lack of clear direction; mismatch between quantitative measures and the nature of social benefit; and the charge that benefit corporations are unnecessary and create additional costs and burdens. When benefit corporations are understood in the light of Dual-Investor Theory, they constitute a potentially significant advance, more a hybrid rose than a monstrous hybrid.
ISSN:0277-2027
2153-7828
DOI:10.5840/bpej201692242