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Proceedings of the International Association for Business and Society

Volume 30, 2019

Proceedings of the Thirtieth Annual Meeting

Ronald M. Roman, Ryan Cabinte
Pages 41-49

The Pyrrhic Victory of Benefit Corporations
Benefit Corporations are Unnecessary and Counterproductive

Benefit corporations are a new corporate form with legal requirements to account for the interests of social or environmental stakeholders. In this paper we discuss the perceived advantages of benefit corporations and critically review the need for this new corporate form. We suggest traditional C-corporations can legally engage in the activities promoted by adherents of benefit corporations and also present evidence of a potential harm arising from benefit corporations’ existence. Analysis of an original survey of over 500 respondents reveals knowledge of benefit corporations dramatically decreased the percentage of people who thought C-corporations’ directors may legally consider the community or the environment when making decisions. However, exposure to benefit corporations did not alter belief in the widely held myth companies are legally required to maximize profit Overall, benefit corporations may represent a pyrrhic victory for those seeking to integrate values, ethics, and sustainability principles into corporate decision making.

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