Signaling the Adoption of the Benefit Corporation Model: A Step towards Transparency

Davide Galli, Riccardo Torelli and Veronica Tibiletti
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Davide Galli: Department of Economic and Social Sciences, Università Cattolica del Sacro Cuore, Via Emilia Parmense, 84, 29122 Piacenza, Italy
Riccardo Torelli: Department of Economic and Social Sciences, Università Cattolica del Sacro Cuore, Via Emilia Parmense, 84, 29122 Piacenza, Italy
Veronica Tibiletti: Department of Economics and Management, University of Parma, Via J.F. Kennedy, 6, 43125 Parma, Italy

Sustainability, 2021, vol. 13, issue 12, 1-16

Abstract: Using the signaling theory as a reference, this research conducts an in-depth analysis of the adoption of the benefit corporation model, a legal and governance framework introduced into Italian regulations in 2016 following legislation introduced by many US states between 2010 and 2013. Focusing on the experience of Italian benefit corporations, we explore how these businesses manage their signaling environment (signaler, signal, receiver, and feedback) to obtain greater transparency. The analysis focuses on companies’ bylaws, websites, and non-financial reports and suggests that the adoption of this new hybrid business model will only translate into an opportunity for greater transparency for one in four benefit corporations. The ability to strengthen the effects of adopting this model, adequate resources, and a long-term approach are required. The model, therefore, appears to present an opportunity for larger companies that have already invested adequately in the development of communication (web) and reporting (report) tools. The results seem to suggest that, on the contrary, for small companies with less experience, transformation into a benefit corporation may generate a risk of ambiguity.

Keywords: signaling theory; benefit corporation; transparency; impact reporting (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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