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Business and Professional Ethics Journal

ONLINE FIRST

published on September 27, 2016

Eugene Schlossberger
DOI: 10.5840/bpej201692242

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 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.