Abstract The concept of corporate responsibility runs throughout the history of capitalism. For more than two centuries, nations have tried to reconcile two realities of capitalism: corporations are very efficient mechanisms for producing wealth, meeting consumer needs, and building industries. Yet, corporations often impose costly negative externalities on stakeholders – employees, communities, society. Society rightfully expects that successful corporations will abide by the rule of law and help meet the expectations and needs of the community. Voluntary action, such as philanthropy, is part of the social contract that imposes responsibility on businesses for more than their narrow economic results.

Purpose -This chapter discusses how one bank, committed to social innovation and investment in low-income communities, evolved into a model of socially responsible banking and exemplary community development financial institution. The authors draw lessons from this experience and propose ways to apply those lessons to other financial institutions.Methodology/approach - The chapter is based on an in-depth case study of ShoreBank. It includes extensive interviews with two of the bank's cofounders, who served as the bank's leaders for more than 37 years.Findings - The case study has identified six key enabling factors for social innovation: (1) a social purpose that is deeply, and effectively, embedded in the organization's mission, strategy, and operations; (2) an ownership structure to support the social mission and a structure (e.g., bank holding company) that facilitates social innovation; (3) capital capacity - that is, ability to create credit through leverage; (4) a deep level of knowledge about the business, the clientele, and the operating environment; (5) talented people who bring both skill and passion for the mission to the institution- building process; and (6) the discipline to continuously innovate, at a scale appropriate to the problem, with resources that are adequate to the challenge.Limitations - This work has several limitations including a focus on one U.S. bank holding company, and based on interviews with that bank's cofounders.Social implications - The chapter provides a rich description of how social innovation through social investment created a meaningful social impact. Important lessons and useful recommendations are drawn for social enterprises that are committed to social innovation in the financial services industry. Originality - The chapter provides insights into the ShoreBank case based on a unique set of data. It offers useful recommendations for social enterprises.

This article explores the hybrid phenomenon of social business, that is, both a form of organization and a practice that deliberately harnesses market dynamics to address deeply rooted social issues through the design and implementation of a core product or service. This new form of hybrid venture melds the social purpose traditionally associated with non-profit organizations with the economic purpose and market-based methods traditionally associated with for-profit firms. This exploratory research inductively explores the process by which social businesses are designed. The result suggests that clear intentionality around social purpose drives the design of these ventures and their associated missions and business models such that they can creatively synthesize competing paradigms (economic and social purpose) within one venture. The tight coupling of mission, method, and operationalization allows for the multi-stakeholder promise of the business model to be fulfilled.

About the authors Foreword Preface Introduction: the corporation in the public square Part I. The Seeds of Corporate Responsibility: 1. Foundations of capitalism and the birth of the corporation (1776-1880) 2. The turbulent rise of the corporation (1880-1900) 3. The Progressive Era and a new business-government relationship (1900-18) 4. The corporation's case for social responsibility (1918-29) 5. The corporation and national crisis (1929-45) Part II. Corporate Responsibility Comes of Age: 6. Corporate legitimacy affirmed (1945-63) 7. A revolution of rising expectations (1963-73) 8. Managing corporate responsibility (1973-81) Part III. Taking Account of Corporate Responsibility: 9. Stakeholders and stockholders (1981-9) 10. Corporate responsibility institutionalizes and globalizes (1989-2001) 11. A new social contract for the twenty-first century (2001-11) Conclusion: patterns and prospects Endnotes References List of plates Index.

This thought-provoking history of corporate responsibility in the USA is a landmark publication documenting the story of corporate power and business behavior from the mid-eighteenth century to the modern day. It shows how the idea of corporate responsibility has evolved over time, with the roles, responsibilities and performance of corporations coming increasingly under the spotlight as new norms of transparency and accountability emerge. Today, it is expected that a corporation will be transparent in its operations; that it will reflect ethical values that are broadly shared by others in society; and that companies will enable society to achieve environmental sustainability as well as a high standard of living. As we enter the second decade of the twenty-first century, the social, political and economic landscape is once again shifting: the need for an informed public conversation about what is expected of the modern corporation has never been greater.

Ideas about business responsibility before the 1920s, as shown in the previous chapter, had primarily revolved around labor issues, and business–government relations, for the responsibility of industry was defined largely by its impact on the economy and by its treatment of employees (and by extension, their families). Progressive reformers had succeeded in bringing social issues created by or impacted by industry to public attention. But it was not until the 1920s that the idea of business's broader social responsibility began to take hold – in the public sphere, in industry, and in newly established professional business schools. This new understanding was driven, in part, by a growing wave of discontent with capitalism and the world tumult described in the previous chapter as communism advanced in Russia and labor unrest broke out across the United States. Throughout the 1920s, labor was increasingly considered more seriously as a corporate stakeholder, and the idea of social responsibility grew beyond labor questions, to include a broader concept of business responsibility that would include, for example, considerations of public health, education, and the environment. New levels of organization, efficiency, and professionalism were brought to bear to improve productivity and profits, but also to bring wider social benefits. Leading these efforts were the nation's largest corporations, which in the 1920s became the main force behind this new agenda of business responsibility.