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Authors

Brett McDonnell

Abstract

This Article analyzes the creation and growth of benefit corporations from the perspective of strategic action field theory in an attempt to shed some light upon both the subject and the methodology. It considers how the new legal field of benefit corporations responded to weaknesses in the existing fields of business and nonprofit corporations. Where major field participants such as directors, officers, employees, shareholders, or donors wish to pursue both financial and public-spirited goals that sometimes conflict without subordinating either type of goal to the other, both profit and nonprofit corporations may be unsatisfactory. Benefit corporations attempt not only to allow entrepreneurs to seek goals other than profits, but also to commit to doing so, thus enticing outside investors and employees to become involved. In explaining how the new legal form arose out of the gap created by these weaknesses, this Article stresses the role of B Lab as what strategic action field theory calls an internal governance unit. B Lab both internally regulates the field and acts as an external champion through creating and lobbying for model benefit corporation legislation. So far, benefit corporation legislation has passed in over half of the states, and around 2,000 companies have adopted benefit corporation status. This Article explores the possibility of the successful widespread adoption of this field by considering the role that B Lab, social networks and organizations, transactional lawyers, and courts could play in responding to many major identified challenges. This Article concludes with some reflections about what this application has taught the author about the strengths and weaknesses of strategic action field theory. A focus on the social and endogenous nature of preferences, and on a mix of selfishness with a search for meaning and connection as motivating forces, are clearly improvements on the conceptual apparatus of the dominant corporate law paradigm, law and economics. However, it remains to be seen whether the theory’s methodological and normative tools are strong and articulated enough to pose a convincing challenge to that dominant paradigm.