1. Representing Good, Green Capitalism: When Firms Reject Corporate Law's Model of Shareholder Supremacy.
- Author
-
Berrey, Ellen
- Subjects
CORPORATION law ,CAPITALISM ,SHARING economy ,CORPORATE giving ,STOCKHOLDERS ,ENVIRONMENTAL degradation - Abstract
For-profit corporations generate much human misery and environmental destruction. According to many critics of capitalism, corporate law is a major culprit, as the legal model of shareholder supremacy enables corporations to put owners' short-term financial interests before all others. Benefit corporation law, the most significant innovation in state corporate law in decades, aims to undermine that model. This new form of progressive corporate law enables the creation of mission-driven for-profit firms that protect directors from liability for pursuing both a social purpose and private profits. Based on two original datasets on benefit corporations' organizational characteristics and online public discourse, this paper characterizes the organizational implementation of benefit corporation law and advances a sociological understanding of how organizations interact with their legal environments. Using descriptive statistics and content analysis, the paper identifies four major findings. First, with few relatively few firms incorporating as benefit corporations and even fewer purporting to provide any benefits, benefit corporation law is not demonstrably transforming corporate America. Second, some important organizational niches appear to be emerging, most notably an ecosystem of social enterprises that use their benefit corporation legal form to signal a shared moral economy. Third, benefit corporations narrate a neoliberal vision of progressive capitalism as good, green commerce. In this vision, firms' goods and services enhance human health and the environment. Finally, most benefit corporations give no outward indication (at least on their websites) that benefit corporation law matters to them, as either a useful resource, a regulatory threat, or a basis of market differentiation. The context of corporate law in general, and the proliferation of a voluntary progressive reform therein, provides an opportunity to revisit legal endogeneity theory. The findings challenge legal endogeneity theory's presumption that organizations' interactions with their legal environments are motivated in large measure by concerns about compliance. [ABSTRACT FROM AUTHOR]
- Published
- 2019