Fostering Corporate Social Responsibility through Hybrid Organizational Forms: A Comparison between the United States and Italy

Abstract

Lawmakers from all over the world are increasingly looking at new ways to foster socially and environmentally responsible conduct on the part of corporations and other for-profit enterprises. Among the available tools are organizational forms that aim at pursuing social missions while distributing profits to their members. Social enterprises established in many jurisdictions may fall into this broad category. However, they typically prioritize social goals over profits. By contrast, new hybrid entities have emerged that rely on corporate governance rules to combine profit and social goals without prioritizing either of the two. This paper examines and compares two prominent examples, the US benefit corporation and its Italian counterpart, the societa benefit, asking to what extent they improve the existing tools to foster corporate social responsibility. The answer unsurprisingly varies depending on the legal system. Each jurisdiction has devised distinctive ways to balance shareholder and stakeholder concerns, adopting disparate enforcement tools. In both systems, however, hybrid organizational forms may do more to help consumers, users and clients, than to support other non-shareholder constituencies.