Sustainable business: The Benefit Company Model

Profit-oriented business encompasses the whole society in many ways, incorporating several areas of influence: labour, health, environment, human rights. Such an awareness has led to an important debate on Corporate Social Responsibility (CSR) among scholars wondering about the following questions: • should the choices of executives in exercising their business activity take into account both the private interest of the shareholders and that of the so-called stakeholders (workers, suppliers, consumers and broadly the community affected by the company’s business)? • should stakeholders be involved in making choices, even beyond compliance with the rules governing the relevant sectors? The paper aims to answer these questions, analysing some corporate law rules as tools to promote a sustainable business model, as the one set forth in Italy with the Law no. 208/2015 on the so-called ‘benefit company’. Such particular corporate form – born and developed in the thirty-four states of the USA – requires of corporate directors to pursue not only the profit-making purpose, but also social and environmental sustainability of company’s business. Analysing the specific rules on management and market information provided for such form of corporation, the paper states first that the variety of purposes likely to be pursued by the directors in a benefit company does not increase their discretionary level in taking management decisions but rather limits it since the pursuit of common benefit – speci- fically set out in the bylaws and featuring the business purpose – cannot be disregarded to protect profit. Through legal arrangements such as the benefit company the legal system is entrusted with the construction of a social market economy supposed to be the aim of the European company law.