The emergence of benefit corporations: A cautionary tale

The legislative formation of the benefit corporation (BC) institutionalizes a new hybrid corporate form in the United States (US) that allows for both a profit objective and a public welfare objective. This corporate form provides entities endeavoring to act in the public interest access to markets and investment capital alongside compatible governance processes. Since the initial state adoption of this form in 2010, 34 states have enacted BC legislation. Our empirical investigation demonstrates and assesses the emergence and evolution of this hybrid corporate form by articulating the discursive framings of a constellation of actors in and around these legislative enactments. The discursive framing is dynamic and contested over time, evolving from a focus on enabling for-profit firms to broaden out their objectives to include social goals beyond profit maximization to a focus on exposing activities traditionally carried out by government or not-for-profit entities to market discipline. One interpretation of the findings is that BCs are a manifestation and means by which the responsibility for public services and public welfare is transferred to the private sector along with the associated public resources. We consider the implications of a shifting landscape of corporate governance and accountability regimes for public welfare objectives.