Designing Social Value Architecture for the For-Profit Company

By Liao, Carol | Canadian Review of Social Policy, January 1, 2012 | Go to article overview

Designing Social Value Architecture for the For-Profit Company


Liao, Carol, Canadian Review of Social Policy


For-profit companies are typically excluded from analyses of the social economy, and with good reason. The concept of shareholder primacy is deeply rooted within the modern corporation's organizational design - pursuing anything other than shareholder wealth is tantamount to bad governance (Berle & Means, 1932). Social gains that occur as a result of corporate actions are always ancillary or subordinate to the primary goal of profit-making. But what is to be said about the emergence of international corporate structures that embed non-profit characteristics into their governance models? Entities such as the "low profit limited liability company" and "benefit corporation" in the US and the "community interest company" in the UK are some alternative models for businesses that produce ongoing social value in addition to profits. If shareholders face restrictions on the amount of dividends they can receive, if directors are obligated to consider community interests when determining the best interests of the company, should these companies be excluded from the social economy conversation? What if a company has a built-in asset lock that requires all of its assets and profits be used only for community purposes? Conceptual boundaries surrounding the social economy are being challenged as hybrid corporate models begin to grow and gain recognition.

To date, these hybrid corporate structures are not recognized in Canada, nor are any policies in place to support and maintain social value creation by private Canadian companies. The increased use of social appeals by the private sector has leftmany confused as to what to make of the seemingly virtuous for-profit company. "Greenwashing" (where companies spend significantly more time and money on "green" advertising than on environmentally-sound practices) and other negative trends have caused many to question the sincerity of these businesses. This is unfortunate for earnest entrepreneurs who, in addition to generating profit, seek to improve human welfare through their work and would like to identify themselves as trustworthy social businesses in the marketplace.

So how do for-profit companies govern themselves in the act of social value creation when there are no existing policies in place? This article offers three initiatives as a starting point for Canadian social entrepreneurs who (a) are eager to use the engine of a for-profit business to market their goods and services and (b) consider the contribution of social value essential to their companies' success. The three initiatives provide the foundations for basic, yet fundamental, architecture for interested companies. In addition to providing practical information for social entrepreneurs, these initiatives highlight a gap in Canadian policy. The emergence of hybrid corporate models on the international stage suggests a unique sector of the social economy is beginning to form. It is critical that Canadian federal and provincial governments address growing demands by establishing policies to govern businesses in the dual mission of profit and social value creation.

The placement of this article within this special issue is to contribute to a scrutiny of the tensions facing the interdisciplinary study of corporate law and social policy. Just as for-profit companies have been omitted from the social economy, policies governing corporate actions have not generally been regarded as "social" policies. The advancement of corporate social responsibility (CSR) and its convergence with the Green movement causes one to question this exclusion, as governments continue to endorse local and international policies that promote social, economic, and environmental sustainability from companies. Social policy can be understood as guidelines for the changing, maintenance, and/or creation of living conditions that are conducive to human welfare. Under that definition, should policies that encourage companies to reduce their carbon footprint, for example, be classified differently from policies that encourage reductions from citizens? …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Designing Social Value Architecture for the For-Profit Company
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.