Mission, governance, and accountability of benefit corporations: Toward a commitment device for achieving commercial and social goals

Abstract

Benefit corporations (BCs) are profit‐with‐purpose organizations regulated by a legal framework for establishing explicit commitments in terms of multi‐stakeholder governance and accountability structures. We comprehensively analyze the theoretical alignment of four concepts (ownership, mission, governance, and accountability) to explain the legal rationale for BCs' unique corporate form. However, the boundaries of BC legislation are blurry, leaving them open to top‐down governance arrangements and weak accountability. To explore this ambiguity, this paper investigates whether BCs implement a de facto (i.e., beyond the letter of the law) multi‐stakeholder structure with governance models and downward accountability mechanisms that balance different stakeholders' interests, instead of focusing only on shareholder profits. This further highlight the soft boundaries imposed by the BC regulatory framework and suggests that more work is needed to explore the relationship between governance models that differently balance stakeholders' claims and the firm's social performance.

Do prosocial‐certified companies walk the talk? An analysis of B Corps' contributions to Sustainable Development Goals

“…Our paper uncovered ambiguity in the prototypical characteristics of certified members of the B Corp category (Durand & Paolella, 2013). The lack of a clearly defined prototype limits the legitimacy of the category to its audience, leading to an undefined system of prosocial norms, values and practices that provides low barriers to entry into the B Corp category and negatively affects its integrity (Bandini et al, 2022; Glynn & Navis, 2013). Our results echo the extant literature regarding the blurred boundaries of the B Corp movement (Lucas et al, 2022).…”

Contribution of Argentinian B Corporations to Sustainable Development Goals: Empirical Analysis Based on Their Practices and Solutions to Socioenvironmental Problems

“…This accounting framework divides the bottom line into three dimensions, namely economic, social, and environmental dimensions [9]. In this framework, the implementation of SDGs has proven to be a major challenge for companies [35], but it emerges as an opportunity to reconsider their approaches [20] using a business sustainability model [27].…”

“…This recognition derives from their sustainability practices, developed within the framework of an integral organizational behavior that focuses on the creation of sustainable value, i.e., economic, social, and environmental value. Moreover, it could be argued that contribution to the SDGs is implicit in the value proposition of the B Corp model, since B Corporations "can contribute to the 2030 Sustainable Development Agenda by simple committing to achieve their own social objectives, even when they ignore that agenda" [27] (p. 26).…”

“…Research by Tabares [14] and by Bandini et al [27] expanded the scarce literature on the contribution of B Corporations to SDGs. Tabares [14] assessed how Colombian B Corporations contributed to SDGs by analyzing corporate social innovation and solutions to social problems flagged by the UN.…”

“…Few studies go beyond the mission statements of companies to focus on their practices and actions and to analyze, based on them, their links and contributions to SDGs [9,25,26]. In this context, the evidence available for developing countries is particularly sparse, and even more so is empirical literature on B Corporations and on how they advance the agenda of SD [14,27].…”