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54 Sw. L. Rev. 90 (2025)
Can Entity Law Cure Corporate Social Irresponsibility? A Response to Becoming a Public Benefit Corporation by Michael Dorff

handle is hein.journals/swulr54 and id is 98 raw text is: CAN ENTITY LAW CURE CORPORATE SOCIAL IRRESPONSIBILITY? A RESPONSE TO BECOMING A PUBLIC BENEFIT CORPORATIONBY MICHAEL DORFF Thomas W. Joo* I. INTRODUCTION Professor Michael Dorff's Becoming a Public Benefit Corporation is a useful and detailed analysis of the Benefit Corporation (BC), and Delaware's analogous form Public Benefit Corporation.' This essay focuses on BC statutes based on the model legislation (the Model Act)drafted by B Lab, a private nonprofit corporation.2 Professor Dorff's pithy thesis is that BC and related statutes are good reinforcement tools but not good enforcement tools.3 I agree, but I am less sanguine than Professor Dorff about what this says about the statutes. At best, the BC statutes enable and facilitate socially responsible behavior by those corporations that wish to pursue it. The theoretical justification for BC laws is that shareholder primacy legally prohibits non-BC corporations from socially responsible conduct. But this theory is incorrect, rendering the BC statutes redundant. Even on its own terms, the statutes merely permit BCs to opt out of the supposed shareholder primacy rule: they do not attempt to change it, the * Martin Luther King Jr. Professor of Law, University of California, Davis, School of Law. I thank Professor Danielle Hart for inviting me to participate in this symposium, the UC Davis School of Law for financial support, and Kristin Brandt of the UC Davis Mabie Law Library for research assistance. Special thanks to Dean Bardouka for helpful discussions about socially conscious entrepreneurship. 1. The B Lab website no longer provides the text of the Model Act, but it is available via archived versions of the site. See, e.g., MODEL BENEFIT CORP. LEGIS. (B LAB, Proposed Official Draft Jun. 24, 2014), https://web.archive.org/web/20150315051404/http://benefitcorp.net/storage/ documents/ModelBenefit CorpLegislation.docx; As Professor Dorff points out, the Delaware statute shares much in common with the Model Act. MICHAEL B. DORFF, BECOMING A PUBLIC BENEFIT CORPORATION: EXPRESS YOUR VALUES, ENERGIZE STAKEHOLDERS, MAKE THE WORLD A BETTER PLACE 66 (Eric Nee & Johanna Mair eds., 2024). 2. DORFF, supra note 1, at 2-3; Frederick H. Alexander, Saving Investorsfrom Themselves: How Stockholder Primacy Harms Everyone, 40 SEATTLE L. REv. 303, 313 (2017). 3. DORFF, supra note 1, at 5. 90