Corporate governance and the choice to take on the hybrid organizational model of the Benefit Company. Evidence from Italy

Purpose – This study aims to investigate the role assumed by corporate governance mechanisms in guiding a corporate organization to take on benefit company (BC) model using the theoretical models of agency theory and stakeholder theory applied to the corporate social responsibility activities of the firm. In detail, it has been hypothesized that the phenomenon of chief executive officer (CEO) duality, independent directors and female directors has a positive effect on the likelihood of a firm taking the model of a BC. Design/methodology/approach – A panel sample of 354 Italian firms taking the institutional model of BC and a control group of 600 firms extracted from the Aida BvD database were analysed. Data covers a period from 2009 to 2018. To empirically validate the advanced research hypotheses, four non-linear probit regression models were estimated. Findings – The results show that CEO duality seems to have a positive influence on the company’s likelihood of taking the model of a BC. Similarly, the independence of the board of directors and the gender diversity within the board of directors have a positive impact on the company’s likelihood of assuming the model of a BC. Originality/value – The research work contributes at integrating the emerging debates into the literature about the relationship between corporate governance and corporate responsibilities by expanding them into new and emerging business context of the hybrid organizational model. Further, the systematic use of the theoretical models of agency theory and stakeholder theory applied to socially responsible activities will improve the understanding of the heterogeneous relationships between corporate governance and choice for the institutional model of BC.