From Profit to Benefit：A Paradigm Shift in Corporate Law, Developing Legal Systems Which Support Social Enterprise Growth
| Autor: | Yung-Chen Chiang, 江永楨 |
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| Rok vydání: | 2017 |
| Druh dokumentu: | 學位論文 ; thesis |
| Popis: | 105 The world is on the brink of a revolution in how we solve society’s toughest problems. The force capable of driving this revolution is “social impact investing”. It not only has massive potential in solving social and environmental problems, but also harnesses the forces of entrepreneurship, innovation and capital and the power of markets to bring benefit and power social improvement. Moreover, it brings the invisible heart of markets to guide their invisible hand. Corresponding to social impact investing, the impact-driven organizations, as hybrid entities which are run with profit motivation and social purpose simultaneously, are generally called “social enterprises.” The first part of this article reviews and analyses the concept of social enterprise from its origin, and regards it as a spectrum. Social enterprise, traditionally, “earns profit for social purposes”. It deals with particular social problems and has asset locking mechanism. However, a new business concept called “mission-led for-profit business”, or “profit-with-purpose business”, is on the rise. It aims at “working with and alongside the social purposes”, and is different from traditional social enterprise. Whereas, these two concepts have some overlaps; thus they are both on the impact continuum. As a result, they are collectively known as “social mission businesses”. This article then finds that the concept of social enterprise in Europe is narrower than the one in the United States. The social enterprise in Europe which belongs to the third sector (social sector) is an entrepreneurial dynamic that drives from the crossroads between the non-profit and cooperative organizations. The legislations in Europe tend to impose strict rules for restricting social enterprises and have governmental policy supports. This structure of regulations resembles that of the non-profit organizations. For example, the Community Interest Company in the United Kingdom. On the other hand, the concept of social enterprise is broader in the United States, under the context of market economy, and focus on social innovation. It includes all “commercial mode with social mission.” The legislations in the United States are more flexible and emphasize on the reformation of the corporation. There is no governmental support, unlike the case in Europe. These two models of social enterprise and legislations are on the opposite ends of the impact continuum. They complement each other rather than conflict with each other. Moreover, because of the difference in history, cultural background and economic context, the European countries and the United States take action from the two ends of the impact continuum. The U.S. believes in “stockholder capitalism”, emphasizing the goal of a company is for the stockholders’ interests and benefits. Hence, the Americans start the reform of the corporate law to embody sociality in the structure of corporations. On the contrary, the European countries believe in “stakeholder capitalism”, considering that a company is pursuing the benefit of the society as a whole. Therefore, companies in Europe care more about stakeholders. To those European countries, it is more essential to start the reform from the commercialization of the third sector organization, rather than from the company law. Finally, this article suggests that if we want to encourage people to establish social mission enterprise and solve social problems by commercial and capital power, we could begin with the reformation of the Company Act. Since our social and economic background is significantly different from Europe and is more similar to American stockholder capitalism, it is more important for us to focus on reform the corporate law first. We should not enact a comprehensive “social enterprise legislation” to define and regulate social enterprise, which limits the entrance of market and suppresses innovation. Instead, we would be better off by creating market and encouraging establishment of social mission corporations, i.e. benefit corporations. Establishing benefit corporation legislation will give social entrepreneurs a new option in social mission business, bring social commitment in business and gain public confidence. In addition to creating a free market for social enterprise and hybrid organization, it embeds sustainable social mission into the DNA of corporation. It inspires all of the corporations to pay more attention to the public welfare when pursuing profit, to balance the interests between shareholders and stakeholders and eventually leads to a paradigm shift in the corporate law. |
| Databáze: | Networked Digital Library of Theses & Dissertations |
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