Benefit Corporations and Director Accountability

362 Abstract On both sides of the Atlantic, the social enterprise movement has been accompanied by a steady rise in the organizational forms available for “profit-and-purpose entities”. Among these, a prominent role play benefit corporations – an organizational form initially introduced in the U. S.A., followed in Europe by Italy and France. In this field, efficiently framing the director accountability regime is arguably the greatest regulatory challenge. After highlighting the key regulatory elements of the three referenced jurisdictions, the paper will provide an essential conceptual primer on the board’s accountability vis-à-vis shareholder primacy and stakeholder empowerment. The central question is whether non-shareholder constituencies have a private right of action against corporate directors. This core topic will be addressed from a comparative perspective, with three contrasting models emerging in this regard, namely a (more) stakeholder-hostile model, a (more) stakeholder-friendly model and, finally, a (more) stakeholder-neutral model. In any case, the private enforcement regimes of directors’ duties do not appear to be entirely effective in ensuring the proper achievement of the benefit corporation’s dual-purpose mission. Thus, public enforcement mechanisms, although not without their problems, may eventually compensate for these shortcomings. Finally, the introduction at the statutory level of an opting-out default rule that serves to empower stakeholders is discussed.