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Interview with Onorevole Mauro del Barba – Assobenefit President

Benefit Societies (SBs) are virtuous companies that manage to demonstrate the existence of a value-based profit, far from the pure logic of profit maximisation. Do you think that the market in which they are immersed makes it possible for them to scale this business model? 

This is a very interesting question, which many of us are wondering about. It is precisely for this reason that Assobenefit has initiated a research focused on the common benefit of SBs. Not least because the change is not only the one told in the impact report but that of a governance truly capable of achieving a dual purpose. The data show that legal change determines different governance, which we have isolated into 5 different clusters: they correspond to 5 ways of understanding ‘doing benefit business’ and are scalable in size, in any sector and starting size. Moreover, observing the long-term trend, if it is true that in the beginning Benefit companies were small and family-run, they now present different nuances, up to the large listed SpA. Thus, the SB qualification can be understood as a universal category to be applied to any type of for-profit company, with differentiated governance and a new way of managing the company. All of this is also the result of a law that deliberately leaves a great deal of freedom to the individual company on how to find its own way: deliberately because the challenge has never been taken before.

Benefit societies have been accompanied, temporarily, by some incentives in the form of tax credits. Did this measure affect the uptake of this model, or was it not a determining factor, numerically speaking?

The measure was used massively: more than half of the companies that became Benefit in that period took advantage of it. However, I do not believe that it was a determining factor in the decision to become Benefit, and it was not with this intention that it was created by the legislature, but rather as a tool to keep Parliament vigilant on this issue and to give a signal to the market that the institutions believe in the Benefit model, even though they have left it – in its application governance – to the freedom of the companies. In the background there is also the issue of tax incentives (not tax credits) that benefit companies do not require, in order to avoid flanking companies that are truly convinced of the model with other companies that are only attracted by the tax benefits. It is clear that a phase is being prepared – also looking at the European trajectory – in which, starting with the Non-Financial Declaration (DNF) and the European Directive on CSR (CSRD) with the relative impacts on suppliers, an attempt is being made through the instrument of reporting to induce changes similar to those that the benefit societies took on a few years ago. I imagine that when this whole regulatory complex is mature, states will have to rethink the system of corporate tax breaks by considering the value generated by companies and not just their profit.

Public-private partnerships are among the enabling conditions for Sustainable Development, according to the UN Agenda 20230 (SDG 17). Do you believe that Benefit Societies have an edge in building such partnerships? And if so, are institutions aware of this ‘virtuous’ profit that could turn out to be a crucial ally in pushing industrial policies of excellence, i.e. more sustainable and responsible?

Good questions 😊 For the change we are imagining, the role of institutions is crucial. What needs to change? Let’s start with the Third Sector: co-planning and co-programming are models that are present but little implemented, which I think the for-profit sector would also enter into. But why doesn’t it happen? Because where there is an entity that is perceived as only interested in the pursuit of profit, it is difficult to get it to collaborate with those who work for the planning of the common good. It is clear, however, that in this the SBs are a candidate to be subjects to be integrated in this mode of planning territorial development, also because the purposes of common benefit are the purposes of the territory… therefore borders of collaboration with the Public and the Third Sector are opened, both of which must be put to the test.  At the end of the day, Benefit Societies are not only tools for changing the internal dynamics of companies but also of the market, thus also through a different influence on relations with institutions.

How would you describe the relationship between Social Enterprises and Benefit Societies, i.e. between the more commercially dynamic side of the third sector and the more responsible side of the private for-profit sector? 

These two elements should overlap and in the future there should no longer be a substantial legal difference between a third sector entity and a for-profit one as both are human organisations working in the interest of the community….but this is a vision of the future. At the moment there is still a harmful separation for both sides, as if the non-profit should not be interested in money and the for-profit only in money. Social enterprise seems to be the only way to work in market failure sectors, limiting profit in exchange for tax advantages. It is, however, a temporary compromise, whereas the for-profit – on the other hand – marks a transformative process of the for-profit market area. Social Enterprises are an exception in the system and the legislator will have to deal with them, to redefine what social enterprise is and what kind of benefit is still possible. SBs, on the other hand, are a strategic tool marking the pace of a system change that I would say is definitive.

What are the next policy developments affecting Benefit Societies? Are there new scenarios in the making or can the ‘Benefit Society phenomenon’ be said to be stabilized in its current forms and dynamics?

We are close to a review phase: on the one hand, it is a question of harmonising – on the reporting side – everything that the European regulations are introducing with what was envisaged for benefit societies from the outset: this is to imagine SBs as a vanguard with respect to what is being considered for companies in general. On the other hand, it is a matter of considering the objectives of common benefit: after 10 years of experience and comparing ourselves with what other countries are doing (for example, I am interacting with the Swiss Confederation, which would like to circumscribe the categories of common benefit – which instead in Italian law are totally free) we will work for a season in which the tax (or incentive) rewards come into play in relation to the measurability of results, and so it could be that the biggest reform we have before us is to draw the conclusions on the idea of common benefit, its measurability and its classification for tax purposes. I imagine this also with some fear, because if this reflection were done too early, there would be a risk of clipping the wings – with a classic, bureaucratic, centralist approach – of a natural evolution that must start from the bottom and mark a paradigm shift. One interesting thing has emerged through dialogue with other nations, I am thinking – at the level of governance – of France, which in its national law on ‘Société de mission’ has introduced the figure of the ‘stakeholder committee’, which is crucial in that it is represented by the direct beneficiaries of the common benefit. A development, this, to which much attention should be paid.

If you could recommend a film and a book to help us understand the responsible revolution required of all for-profit actors, which titles would you recommend?

I read a book by Francesco Cirillo ‘Attivarsi’, which talks about concrete experiences in the area that reminded me of the spirit of change brought about by the Benefit Society, making me see how in different sectors there is already so much going on that I cannot believe that a more responsible way of doing business will not be achieved. I also recommend two other books: “Futuro Artigiano” by Stefano Miceli and “Verso un’economia Integrale” by Massimo Folagor. In general, I believe there is a lack of economists capable of developing these demands for change of the private for-profit sector that come from below by transferring them into a global economic model. An interesting sign is certainly the movement “The economy of Francesco”, also interesting is Piketty’s theory or the political vision of the “third way”, but more is needed… as I always say to the young people I meet in university when I explain the revolution of the Benefit Societies.

NB: the interviews shown here are not part of paid commercial services. They have the sole purpose of sharing ideas, projects and reflections among subscribers to the De-LAB newsletter.