Social Enterprise, Corporate Objectives, and the Corporate Governance Narrative
American Business Law Journal
Throughout history, both practitioners and academics, in fields such as business law, and economics, have debated various aspects of the corporate entity. Such as why corporations exist, the proper objective of the corporation, and the structure of corporate law in the United States. While this debate is well established, a more recent corporate entity development is the rise of the "social enterprise." While there is no consensus definition of this term, we believe that it is best understood, for purposes of legal analysis, as "an organization that utilizes an earned income strategy to accomplish a primary organizational mission of creating value for one or more stakeholders besides the organizations' shareholders or owners." In practice this means that social enterprises are organizations that have a primary objective of creating value for some constituent other than shareholders (i.e., their primary objective is not maximization of shareholder wealth), but they pursue this objective through a traditional business-like strategy of earning income, rather than relying solely on others’ benevolence.
Blount, Justin and Nunley, Patricia, "Social Enterprise, Corporate Objectives, and the Corporate Governance Narrative" (2015). Faculty Publications. 59.