The Benefit Corporation: an Economic Analysis with Recommendations to Courts, Boards, and Legislatures

THE BENEFIT CORPORATION: AN ECONOMIC ANALYSIS WITH RECOMMENDATIONS TO COURTS, BOARDS, AND LEGISLATURES

This article provides an analysis of the benefit corporation including its duties, corporate governance, statutes, and recommendations. It begins with a brief analysis of the history and norms of corporate governance – the dominant paradigms of thought and theories of corporate existence – and discusses how they gave rise to the benefit corporation. t then analyzes the predominant views on corporate governance today, institutionalized in that venerable State of Delaware’s statutes and precedents. The article then critically analyzes the benefit corporation’s key elements and poses key questions that create uncertainty for courts to resolve. The article concludes by describing how courts might optimally resolve theses uncertainties and defining some processes and procedures that boards of directors may use to mitigate exposure.