Kevin Levillain

Blanche Segrestin

Armand Hatchuel

CAN VENTURE CAPITAL FOSTER INNOVATION? A STUDY OF THE COUPLING BETWEEN INNOVATION AND FINANCE

Can venture capital foster innovation? A study of the coupling between innovation and finance

Kevin Levillain, Blanche Segrestin, Armand Hatchuel

innovative capabilities [START_REF] Engel | ACCELERATING CORPORATE INNOVATION: LESSONS FROM THE VENTURE CAPITAL MODEL[END_REF] [START_REF] Birkinshaw | Venturing to Succeed[END_REF]. It has also become a means for public policy to foster some technological or environmental transitions (eg. Cleantech) [START_REF] Hargadon | Misguided Policy? FOLLOWING VENTURE CAPITAL INTO CLEAN TECHNOLOGY[END_REF].

However, recent research reveals that the profitability of venture capital funds is rather low [START_REF] Mulcahy | director of private equity at the Kauffman Foundation[END_REF] and that their impact on innovation is more uncertain than expected [START_REF] Mason | Is it worth it? The rates of return from informal venture capital investments[END_REF], thus putting the model of venture capital itself into question. This raises the opportunity to review the canonical model of venture capital as presented by the economic and management literature, to exhibit its major assumptions and to assess whether these assumptions have been verified in practice for the past decades. As a mechanism to foster innovation for young firms in highly technological and capital-intensive sectors, we also think that it is of interest to question whether this model takes recent advances in innovation management into account, or whether it is a mostly finance-based model that does not try to couple with a representation of innovation processes.

I.B. Methodology and Research Questions

Hence our two research questions:

1. What are the theoretical models behind venture capital rationale? How to explain their failure? 2. To which model of innovation management is this rationale coupled?

We organize our research setting in three steps. First, based on the founding literature on the organization of Venture Capital, we characterize the expected behavior and functioning of the average Venture Capital fund and compare it to the recent advances of literature in innovation management. With this data, we build a theoretical model of VC in which the grounding hypotheses to ensure its success are made clear. Our first result is to show that this model, mainly directed towards risk management only, does not take into account the management of innovation itself. Indeed, beyond the classical syndication and diversification of portfolio, models of venture capital often refer to real options management (van Putten et [START_REF] Van Putten | Making Real Options Really Work[END_REF][START_REF] Wadhwa | Exploration and Resource Commitments in Unequal Partnerships: An Examination of Corporate Venture Capital Investments[END_REF]. And a lot of criteria, selection logics and coaching or monitoring instruments are presented in the literature [START_REF] Freeman | Models of Innovation: STARTUPS AND MATURE CORPORATIONS[END_REF] [START_REF] Kortum | Assessing the contribution of venture capital to innovation[END_REF]. But our analysis reveals that they generally do not really take into account neither the specificity of radical innovation [START_REF] Colarelli | Opportunity recognition and breakthrough Innovation in large established firms[END_REF][START_REF] Leifer | Radical Innovation: How Mature Companies Can Outsmart Upstarts[END_REF] nor the managerial levers for creative design [START_REF] Hatchuel | C-K design theory: an advanced formulation[END_REF], and consider most of the time the essential features of the start-up as exogenous variables.

Second, based on a more critical current of the literature on VC and its actual performance, we further characterize the limits of the average model by highlighting its flaws, especially due to the fact that some of the major grounding assumptions cannot be verified in practice. Indeed, venture cap is based on logic of risks diversification, which should suppose that funds finance a high number of independent and high-potential start-ups [START_REF] Bengtsson | Covenants in Venture Capital Contracts[END_REF]). Yet, the financing schemes of the funds themselves lead to cut radically the number of potential candidates that experts examine, raise the capital invested in each project, and target sectors that funds know best. Besides, statistical studies have shown that the probability of very high success (e.g. x10) is too low to sustain this diversification model.

Lastly, we conduct semi-structured interviews with 9 managers of French venture capital funds, in diverse sectors (e.g. pharmaceuticals, entertainment, tourism, etc.) to balance the theoretical model with an investigation on the actual functioning of some venture capital funds. We show that, compared to the expected behavior according to the theoretical model, managers of VC funds can actually reflect on an implicit model of innovation management and play on some variables, such as the probability of success or the value of the projects. We identify original ways VC funds use to couple financing decisions and innovation management. For instance, we observe how VC funds can build on the absence of independence between start-ups to foster the development of a synergistic ecosystem. We also identify that VC funds play on the "external value" of the project by actively exploring, through adequate corporate alliances, companies whose capabilities could be the most expanded by the project. We thus claim that our analysis can contribute to a more grounded model of VC logics, with actionable methods both for founders and investors of start-ups.

II. THE CLASSICAL STRUCTURE OF VENTURE CAP PORTFOLIOS

According to the literature, private equity investment (and more especially seed funding and venture capital) aims at bridging an identified "equity gap" between the available investment funds and the needs of young firms (and in particular capital-intensive technological start-ups) for stable financing.

Conventional investment does not indeed distribute equitably along all the development phases of the firms. Front-end phases of start-up development are notably the riskiest (Macmillan 1931), which should entail a higher remuneration of the capital ("risk premium") than conventional schemes. They also require a higher illiquidity than most other investments, given the time needed for young start-ups to reach profitability or, if applicable, an appropriate selling value. This also entails an "illiquidity premium" that adds to the first one.

The economic consequence of this observed equity gap is the undervaluing of research outputs, especially public research outputs, and consequently a negative influence on economic growth. This analysis justifies the common emphasis put on the role of the States to bridge this gap, especially because New Technology-Based Fimrs (NTBF) are pivotal actors in the modern technological transitions. Regarding public policy, private equity investment has also become a means to leverage the development of innovative sectors with strong social or environmental impact. Through the participation to specialized funds, States may for example contribute to the development of sectors such as "Clean Technologies".

Historically, the support of the States became necessary given the importance of the financing of start-ups to boost competitiveness and growth, and also to contribute to the promotion of (public) research. This can be seen through the creation of specific tax-favored statutes, and new guarantees.

II.A. Institutional structure: General and Limited partners

The capital investment is born in the United States. In 1958, the Small Business Investment Act codifies the rules of the U.S. financial and tax advantages granted to the venture capitalists who invest in new projects and accompany entrepreneurs until these projects become profitable. But the first "professional" investment structures were already recognized in the United States since 1940 (Investment Company Act). The first funds to be established, just after the war, were legally partnerships with public shares that could easily be exchanged. So was the famous ARDC (American Research Development Corporation) founded by General Doriot.

However, the difficulties created by the volatility of investors, who did not always remain involved for the expected period, led subsequently to promote the so-called "closed" funds.

After the first introduced SBIC ("Small Business Investment Companies"), in 1957, it has been the "Limited Partnership" that spread the most in the common law countries. Its model is as follows:

• A fund is usually established as a Limited Partnership for a limited time (usually 10 years). Investors (called Limited Partners, LPs thereafter) own the majority of the shares (more than 90%) but do not take investment choices nor decisions about the management of ventures. In return, their liability is limited, unlike that of the General Partners.

• Conversely, the General Partners (GPs) own only a small amount of capital, but are being entrusted with the management. They are paid in two ways ("2-20 rule"): they earn a 2% commission on the funds raised upon the LPs and 20% of the generated profit, if any [START_REF] Bengtsson | Covenants in Venture Capital Contracts[END_REF].

• Funding is done by conditional steps and funds often work by "syndicating", which allows the pooling of risks and also promote learning [START_REF] Ferrary | Syndication of Venture Capital Investment: The Art of Resource Pooling[END_REF].

II.B. Underlying hypotheses of the classical model

Based on these general principles, private equity investment requires the description of a few additional hypotheses to understand the financing rationale with a rather simple model:

Hypothesis 1 -Investments are independent from each other.

VC funds follow classic principles of risk management: they aim at building diversified portfolios of projects, which decreases the overall risk of the entire portfolio. This assumes that the possible projects of start-ups to be funded follow an initial structure of independence.

According to this hypothesis, the success of some of the projects compensates the failure of the others. Each VC fund would then have an incentive to maximize the number of funded projects, and to reduce its share in each.

Hypothesis 2 -There is a sustainable probability for projects with high potential (the "gold nuggets")

The profitability of the VC funds relies on the assumption that even if the majority of the funded start-ups might result in an economic failure, there is a certain amount of them that will succeed with a "multiple" high enough to cover the losses. In other words, there is a hypothesis that every funded start-up has a certain probability -admittedly low, but high enough -to reveal a very high potential value (at least ten times the initial investment), thus making the financing operation globally sustainable. This should help motivating management teams: the GPs are indeed typically paid on the "2-20" rule: they keep 20% of the generated profit. This clearly encourages them to maximize the capital gain. More especially, it is the potential capital gain on the resale of the shares (or the gain through IPO) that is supposed to be attractive, and notably high enough to statistically compensate projects that fail.

Hypothesis 3 -VC funds have the capability to make their investment progressively more reliable by learning about the probability of success of projects they support within their ecosystems.

Start-ups have a probability of success that is a priori unknown. But the model of VC relies on the idea that if the funds can not act to change this probability, it is however possible to conduct increasingly accurate investigations to establish presumptions of success or failure, and therefore more reliable investment:

• Investment in a start-up is analysed through the principle of real options. Following a first round of investment with small amounts, aiming at create on "option" to further invest, the more information is gathered on the investment project, the more the risks become clear. The investors then have the opportunity to invest, if they wish, for a second round. This model of "options" has notably inspired investment logics in large enterprises [START_REF] Battistini | The State of Corporate Venturing[END_REF].

• Besides, the main role of the GPs is to follow the "Due Diligence", which is the required research and control of information to help them having a sound judgment on the activity, financial situation, results, development perspectives and organization of the funded enterprises. In other words, the GPs are responsible for seeking information needed for the evaluation and control of start-ups and their business plans. In addition, they provide resources and custom-made monitoring for start-ups teams.

Literature showed that there exist diverse profiles of venture cap investors: humanbased, financial or technological... [START_REF] Knockaert | The extent and nature of heterogeneity of venture capital selection behaviour in new technology-based firms[END_REF]. But the hypothesis remains nonetheless that the probability of success is intrinsic to the project, or in other words "exogenous" to the work of the GPs. It is worth noting that this competence of selection and monitoring is the one to be valued by investors (LPs) in their choice of GPs teams to whom they entrust their funds.

III. THE LIMITS OF THE MODEL

III.A. Does this Venture Capital model really foster innovation?

There is a growing consensus in the literature over the demonstration that large industrial groups do not support themselves the renewal of their products and technologies. Their processes of risk management and NPD contribute on the contrary to prevent disruptions and radical innovations. Conversely, start-ups backed by venture capital funds are deemed to be more innovative and job-creating than others small or large firms. Incidentally, some large companies draw their inspiration from this model to develop their own investment capabilities [START_REF] Engel | ACCELERATING CORPORATE INNOVATION: LESSONS FROM THE VENTURE CAPITAL MODEL[END_REF].

More generally, Venture Capital is seen as a new model for specific innovation, which is neither that of the company or of the entrepreneur: according to Florida, VCs would provide a "gatekeeping function". The development paths being generally constrained and dependent on institutional and social contexts, technological breakthroughs would then contribute to open new blank design spaces. By gathering information on these new design spaces in an organized way, VC would then help developing these new potentials. They support the creation of companies and the required investments to overcome technical frontiers. At the end of the day, their choices would then steer the socio-technical trajectories and sow the seeds and create appropriate conditions for future developments [START_REF] Florida | Venture capital-financed innovation and technological change in the USA[END_REF]).

In addition, several studies have sought to show that statistically, VC backed firms were more innovative, especially in terms of number of patents filed. Thus, for [START_REF] Kortum | Assessing the contribution of venture capital to innovation[END_REF]: "Focusing on a conservative middle ground, a dollar of venture capital appears to be about three times more potent in stimulating patenting than a dollar of traditional corporate R&D. Our estimates therefore suggest that venture capital, even though it averaged less than 3 % of corporate R&D from 1983 to 1992, is responsible for a much greater share -about 8% -of U.S. industrial innovations in this decade."

These figures are yet to be taken with caution: it should be noted that a third variable might mediate this relationship. VC operations generally occur where major technological breakthroughs have recently emerged, which may explain the unusual frequency of patents [START_REF] Gompers | Specialization and Success: Evidence from Venture Capital[END_REF].

Beyond any doubts that we can raise about the ability of VC backed firms to file more patent than corporate R&D, there are several other issues that worsen the picture: our analysis shows that the results of private equity investment remain desperately low, be it in terms of economic growth, or even in terms of return on investment (profitability).

III.B. Private equity investment only partially resolves the "equity gap"

Although private equity is deemed to bridge the equity gap by providing financing solutions where usual funding is insufficient, biases in the selection of companies are both remarkable and detrimental.

First, to qualify for very high yields, investors privilege start-ups whose technologies have applications for very large and rapidly deployable markets. Hence a preference for applications whose markets are clearly identified, mostly B2C, and, as Hargadon emphasizes it, "scalable" and with "rapid pay-off" [START_REF] Hargadon | Misguided Policy? FOLLOWING VENTURE CAPITAL INTO CLEAN TECHNOLOGY[END_REF]. Typically, VC investors prefer applications in digital technologies, software, or biotech to application in more heavy industrial fields. Consequently, although Venture Capital was supposed to help investing in sectors with strong impacts (ecological transition, etc.), Clean Techs are for example excluded from the scope of its business. Indeed, the risks generated by a still unpredictable regulatory intervention are too strong, the willingness to pay of potential customers is too volatile, government support is a major factor, etc.

Second, the rules of remuneration of GPs urge them to invest in a lower number of projects, with higher amounts. Indeed, insofar as each considered case requires due diligence and a strong analysis effort, while GPs earn a riskless 2% per year of the total volume of funds raised (independently from the number of projects in which these funds are distributed), the teams of analysts are not incited to increase the number of expensive tests for applicants.

Over the average course of an investment cycle (about 10 years), GPs thus recover 20% of the initial funds, a riskless return that is quite comparable (if not higher) to the overall 20% uncertain return on generated profit (see below). Thus, for a given overall investment volume, the GP will prefer a small number of investments, with larger amounts, just the opposite of the diversification hypothesis on which the initial model was based. As a direct result, startups asking for more funds at the beginning have paradoxically a greater chance of being supported by VC funds!

III.C Venture Capital suffers from low financial returns

In addition, venture capital funds do not achieve the levels of return on investment that were expected at their creation. According to the literature, this is due to the agency relationship between LPs and GPs, and precisely to the risk of opportunism thereof. More specifically, the proposed reasons for the low profitability are twofold:

-Quite typically, the intermediary structure between LPs and GPs is criticized by the risk of opportunism that it generates. For example, the limited lifespan of the fund and the method of compensation for GPs lead to sub-optimal behaviours: instead of following the "real options" mechanism, projects that have passed the first round keep on being financed until the end of the fund so that GPs collect the annual 2% return, even when they have information showing that they have a high chance of filaure [START_REF] Kandel | VC Funds: Aging Brings Myopia[END_REF].

-More surprisingly, the behaviour of investors themselves is put in question: they seem to fall for promises of extraordinary profitability, and do not question counter-productive management rules. A recent report from the Kauffman Foundation, eloquently subtitled "We have met the enemy and he is us", is a severe blow to the classical model [START_REF] Mulcahy | director of private equity at the Kauffman Foundation[END_REF].

According to this institutional investor, who has invested in hundreds of funds for years, the system has provided more than 20 billons dollars per year for 15 years, but was only marginally profitable compared to the financial markets. According to the report, this is because LPs have mandates to invest pre-determined amounts of cash. Therefore, they invest in volume on the whole, instead of case by case, thus including funds that are far from being top-performers. Furthermore, the evaluation criteria are misleading and inappropriate:

• "Top quartile" or Internal Rate of Return are self-referencing criteria, which mean nothing on performance relative to the market • The myth of the J-Curve normally justifies the patience of investors, but lacks of evidence in practice... In addition, for every investment in advanced technological areas, venture capitalists are said to suffer a "double tyranny": the first facet is the high degree of risk they face in nascent technological fields, and the second is the impossibility for funds to organize a true diversification of the portfolio, given the high level of expertise and specialization that each investment in such technological companies require [START_REF] Murray | Why has the investment performance of technology-specialist, European venture capital funds been so poor?[END_REF].

Nevertheless, the analysis of the financial results of VC calls for a deeper questioning: admittedly, according to studies, financial performance greatly varies depending on the chosen funds, and they emphasize the cyclical nature of performance. But more importantly, the results are highly dependent on the observation rule: they can be seen as extremely good if one only considers companies that have made an Initial Public Offering (IPO). According to [START_REF] Cochrane | The risk and return of venture capital[END_REF]:

"The average return to IPO or acquisition is an astounding 698 %." However, "there are a few truly outstanding returns of thousands of percent and many more modest ( ≅ 100% )" [START_REF] Cochrane | The risk and return of venture capital[END_REF].

Cochrane insists on the bias of considering only listed companies: by definition, these are the cases where the highest return are expected (because the higher the company valuation, the greater the chance of an IPO). Once this bias is corrected, the "real" return is estimated at 5.2 % per year. Which is significantly lower, and notably lower than the return of the S&P 500 (15.7 %) and that of the average Management Buy-Out (17.6%) [START_REF] Murray | Why has the investment performance of technology-specialist, European venture capital funds been so poor?[END_REF].

These weak returns are confirmed by other studies, and statistics show that, despite some companies that are able to generate returns in the order of x10, the normal distribution of portfolios is overall too low to ensure the sustainability of venture capital. For instance, according to [START_REF] Florida | Venture capital-financed innovation and technological change in the USA[END_REF], surveys on the performance of 10 leader funds from 1972 to 1983 show that over 525 investments, only 56 were "winners" (10.7%) and generated more than half (540 million of 823) of the portfolio's value, and more than half of the investments (266) have hardly been profitable. According to [START_REF] Mason | Is it worth it? The rates of return from informal venture capital investments[END_REF] a survey over 383 investments harvested by 13 venture capital funds from 1969 to 1985 shows that only 6.8% of investments make x10 returns, against 60% that result in losses. Overall, "almost 50% of the total final value of the funds came from just 6.7% of investments."

IV. QUESTIONING THE FOUNDING HYPOTHESES OF VC

This leads us to question the hypotheses at the base of VC: as we have seen, the model is based on the assumption that random "gold nuggets" are frequent enough to compensate the losses of the majority of projects. However, the analysis shows that the profitability of a couple of "golden" companies is in fact not sufficient to finance the investigation of a broad portfolio.

In particular, if the highly successful projects only generate ten times the initial investment, then to be profitable VC funds would require that more than 7% of the population of start-ups turn out to be "gold nuggets". What seems to be contradicted by the facts.

To summarize, there are two major contradictions in the initial model:

-First, there is a contradiction of interests on the amounts of investments: LPs would benefit from increasing the number of projects (to reduce the average investment ticket) in order to diversify risks. GPs instead have an incentive to minimize the number of cases studied and selected.

-The second contradiction comes from the insufficient frequency of profitable companies to justify a portfolio approach.

Summary of the hypotheses and contradictions

Parameters

Classical model of Venture High enough to reach profitability Thought to be high enough but limited in practice However, is this canonical model really the one that is followed by venture capitalists?

As we have seen, this model is expressed in purely financial terms (classical risk management) and is not connected to any innovation rationale. We could wonder if, in practice, VCs do not have a different reasoning to select and support their investments. In particular, do they have means to:

1) play with the probability distribution?

2) or with the valuation of projects?

3) Do not they also have other payment methods that avoid the bias shown above?

V. EMPIRICAL ALTERNATIVES: COUPLING BETWEEN INNOVATION AND FINANCING

At this point, it appears that the literature has not taken sufficient account of the practices, sometimes very different, of contrasting funds. Yet, our interviews shed light on interesting forms of coupling between the investment rationale of some VC funds and their management of innovation. We can give some first examples of these couplings, showing how they change the parameters of the classical model.

V.A. A model of interdependence between projects and external valuation in the ecosystem: Innobio

Innobio is a fund created by a French public actor in private equity (CDC Entreprises), which specializes in a specific area: the fund is positioned on "biotech products for health that enable considering collaborations with pharmaceutical companies".

As a "sector fund", we could have assumed that it undergoes the so-called "double tyranny". But it actually takes advantage of a position on a particular field of innovation, where subscribers (LPs) are not just investors. These are big pharmaceutical companies (such as Sanofi, Merck, ...), that therefore meet to scrutinize various areas of innovation they can not handle alone.

• Innobio has thus established a strategic committee, composed of experts from the different pharmaceutical companies. Thanks to this committee, the fund significantly increases its analysis capacity and its ability to monitor funded startups (risk and innovation analysis, access to competences etc.). Therefore it directly increases the probability of project success.

• Then, the interest for the LPs is not limited to a start-up project in particular: pharmaceutical companies in fact invest in the fund for the overall strategic monitoring it allows them to make. One can then talk about "cross value" or synergies, insofar as the value of investing in a particular company in fact influences the successes of the others.

• Lastly, Innobio significantly increases the value of start-ups by playing on the "external" valuation factor. Unlike the value revealed by the business plan (typically, expected revenue from the product launch), the challenge is to promote the potential of start-ups for the pharmaceutical companies themselves.

Some of the technologies or processes can in fact leverage or amplify the potential of these large companies: one can speak of potential for expansion. It is usually this type of valuation that leads to very high prices for the selling of startups (e.g. Instagram, etc.).

In conclusion we can identify a first underlying model of innovation behind the rationale of Innobio. One can call it a model of venture cap with "cross value" and "external potentiation" effect.

V.B. A model of "prudent broker" with focus on external valuation: Scientipole

Initiatives

Our second case, the fund named "Scientipole Initiatives" shows another configuration.

"Evergreen" model

First of all, the structure of the fund differs from the Limited Partnership with General and Limited Partners. Like the usual company, the equity to be invested in start-ups is the capital stock of the company, which is not separated in different "tickets" with expected investment duration. The fund thus invests directly, without distinguishing LP GP. It avoids the problem of the large number of investments and rather focuses on a "flow" of projects with limited involvement.

"Prudential" model:

Compared to traditional funds that select a few high return sectors, what furthers the "equity gap" for a whole part of the industry, "Scientipole Initiative" is not positioned on a specialized field, but plays more on the independence between projects. Indeed, the evergreen model and the research of varied industrial applications enable keeping low invested amounts per project, and guaranteeing the diversity required for a true risks portfolio management.

Accordingly, it does not look for very high multiples. Instead of focusing on "gold nuggets" to compensate the failures, the issue here is primarily to sustain the activity for every project, by fetching buyers or investors that are able to sustain the project. One can say that the financing policy is prudent: Scientipole's goal is to boost the distribution curve on near λ = 1 returns, instead of only promoting high returns. This enables reopening the portfolio of industrial investments (e.g. Muses, niche electric vehicles) and secondly significantly reduces risk.

"External valuation" model:

But the efforts of Scientipole initiative clearly reside on the external valorization of the projects: instead of trying to be competent on the core businesses of every start-up (which are all the more varied and ever-changing between Internet, automotive technologies, cultural events, etc.), the team encourages entrepreneurs to make frequent prototypes and discuss with buyers or potential clients. Rather than ensuring very high cash flows, the challenge is to secure the expansion potential that the projects may create for other companies. This translates into practice by contracts that focus less on the mathematical valuation of future cash flows (Net Present Value) when the fund sells its shares, than on the valuation for the ecosystem. Hence the importance of "accretion" mechanisms, which allow entrepreneurs to redeem some of the shares in their company, and thus capture a greater part of the value, if the market valuation for the company finally exceeds the expected offering price set at the first estimate (for the first round of investment) by contract between start-up founders and investors.

So one can describe the model of Scientipole Initiatives as of a "prudent broker focusing on high external valuation". Again, the main assumptions of the initial model of VC are challenged and a strong coupling with the innovation strategy appears.

V.C. A model with minimal investment: Innovigo.com

In some cases, the creation of a fund is compromised by the low probability of high return. When investment amounts in the sector are generally low, as it may be the case for Internet start-ups, then 2% of the funds raised are not sufficient to run a team of GPs. In these cases, some investors, such as Innovigo, adopt another strategy.

Innovigo is a support structure in the highly specialized field of leisure services and tourism on the Internet. In this case, the field is highly specialized so one cannot assume anymore that the projects are independent. Instead of investing in start-ups, Innovigo chose to give them advice (selective advice) aiming at accelerating the business development in the niches with the highest potentials. The logic is basically the same as those of investment funds. Yet, the remuneration is very different and Innovigo builds experimentation and collective exploration devices by connecting start-ups with traditional businesses.

-Innovigo is funded primarily by providing consultancy to large companies seeking to understand and follow new logics of consumption on the Internet.

-In this context, these large companies accept to conduct experimentations for startups : they test for instance the feasibility and usefulness of a specific data collection (e.g. customer online profiles for a hotel chain, etc.).

-If start-ups, thanks to Innovigo support, achieve certain objectives (increase of turnover, etc.) then Innovigo is also compensated in equity thanks to stock options of equivalents.

One can see that, as of Innobio, Innovigo leverages the ecosystem around Internet services in a particular domain. Interactions between large companies and start-ups enable identifying a "coupled" value, which literature had already highlighted.

One can thus describe Innovigo's model as coupling between a system of "venture consulting" and a "cross value" and "external potentiation" model.

Parameters

Features of the model

Scientific innovation field structuration

Ecosystem structuration, insertion, and innovation steering capabilities

CONCLUSION

In conclusion, the classical model of venture capital seems to be built on problematic assumptions. These could partly explain the low returns observed so far. In particular:

-The structure of compensation for funds management teams led to increase the invested amounts in each project, which is contrary to the principle of diversification of portfolios.

-In addition, the statistical model is based on an assumption of frequency of "gold nuggets" to be high enough, which does not seem to be verified in practice.

More generally, the statistical model does not take into account possible levers of innovation management. Yet, in fact, some funds clearly articulate their investment strategy on methods of innovation management. Our analysis reveals several possible variables for the coupled innovation-financing strategy:

-Structuring of a field of innovation, -Insertion in an ecosystem -External valuation.

Further research is required to validate these initial findings and to identify other models of coupling between investment and innovation. The research will include studying the conditions and modalities to increase the potential value of a start-up.


Kevin Levillain

Blanche Segrestin

THE BLIND SPOT OF CORPORATE SOCIAL RESPONSIBILITY: CHANGING THE LEGAL FRAMEWORK OF THE FIRM

Keywords: Corporate Social Responsibility, Corporate Purpose, Legal Framework, Flexible Purpose Corporation

de niveau recherche, publiés ou non, émanant des établissements d'enseignement et de recherche français ou étrangers, des laboratoires publics ou privés.

The Blind Spot of Corporate Social Responsibility:

Changing the Legal Framework of the Firm

Introduction

For several decades now, the stream of research on corporate social responsibility (CSR) has worked to incorporate social and environmental objectives into management practices.

Although a specific definition, including its implementation and practice, has still not met general consensus, a shared common core can be found to describe CSR [START_REF] Dahlsrud | How corporate social responsibility is defined: an analysis of 37 definitions[END_REF]. It encompasses, whether in a broad or narrow sense, the potential responsibilities incumbing to firms to take into account the impacts of their activities upon their stakeholders, be it social, economic or environmental impacts, and the voluntary initiatives that these firms take to have a better impact on society whilst remaining economically sustainable [START_REF] Carroll | Corporate Social Responsibility: Evolution of a Definitional Construct[END_REF][START_REF] Dahlsrud | How corporate social responsibility is defined: an analysis of 37 definitions[END_REF].

As such, one might have relied on this research current to explore innovative theoretical and practical approaches, influence practices, or develop new models to account for and even achieve change. And corporate practices are indeed changing and offering new paths for research, as CSR has now extensively spread in the business communication and inspired widely advertized initiatives. However, certain empirical innovations seem to have emerged apart from this current, and are now deeply challenging its theoretical frameworks by focusing on the legal side of corporations. In recent years, legislation establishing new forms of corporate contracts has been introduced in several American states. Legal entities such as Benefit Corporations and Flexible Purpose Corporations (FPC) allow any firms that wish, to change their articles of incorporation in order to explicitly include social and environmental objectives in their corporate purpose. They were created to make up for the fact that the traditional legal provisions of corporate law tend to inhibit firms seeking to achieve a strong societal impact.

Contrary to the voluntary approach of CSR, the promoters of these forms did not hesitate to change the legal framework itself. They gave up the idea of finding compatibility between societal aims and the "standard" firm, taking the opposite path to traditional management research proposals. These corporations have attracted only limited attention yet in management literature, showing a difficulty to account for the impacts of a legal innovation on management models, and their effects are mainly studied from a jurisprudential viewpoint in American law reviews [START_REF] Munch | Improving the Benefit Corporation: How Traditional Governance Mechanisms Can Enhance the Innovative New Business Form[END_REF][START_REF] Murray | Choose Your Own Master: Social Enterprise, Certifications and Benefit Corporation Statutes[END_REF][START_REF] Plerhoples | Can an Old Dog Learn New Tricks? Applying Traditional Corporate Law Principles to New Social Enterprise Legislation[END_REF], with the notable exception of [START_REF] Hiller | The Benefit Corporation and Corporate Social Responsibility[END_REF].

'Practical' innovations of this sort naturally raise questions in research circles. How come research on CSR did not lead to, or at least help anticipate innovations of this sort? Are there scientific biases that explain why this new empirical system was not detected by the theory? And which wider theoretical framework could be used to account for these new movements?

In this article, we aim to show that the new practices reveal a blind spot of CSR research and perhaps, more generally speaking, of management research. We suggest that in reaction to the contractual/legal view of the firm, CSR adopted what we will call a 'strategic attention' view of the firm by conceptualizing a social and environmental 'scope of attention'. This new management object was novel in that it went beyond economic, regulatory and statutory obligations. Research strived to show that extending this scope of attention had strategic value and that this attention to various stakeholders could therefore be managed within the normal strategic and legal framework of firms. However, this reasoning failed to note that another path was possible, both in theory and in practice. Instead of taking the legal framework for granted, the new forms of corporation show that it was possible to revisit the content of contractual commitments, in order to include the scope of attention in the form of socially oriented corporate purposes.

These innovations have major implications for research. We will show that they demonstrate the need a) to incorporate the legal framework into the field of management research; b) to re-think the notion of corporate purpose so that it is not limited to profitmaking and c) to redefine the content and the perimeter of the actors 'committed' to the firm.

More fundamentally, if CSR research did not think of revising the legal framework it was probably because management research as a whole had not questioned it. In the face of the current challenges, we therefore believe that management research must study the dynamics of strategic attention and of legal contracts with a view to building collective action.

I. CSR: a 'strategic attention' model with no change in the legal framework

The Corporate Social Responsibility movement (CSR hereafter) has historically strived to study how the interests of the firm match with those of society. The widely accepted period of time to study what Carroll names "Modern CSR" usually begins with Bowen and Drucker, theorizing the social responsibilities of the businessman and progressively of the "corporation" [START_REF] Bowen | Social responsibilities of the businessman[END_REF][START_REF] Drucker | The principles of management[END_REF] 1 . Up to this day, the CSR research current has been a very prolific one, and even though the research stream covers a very wide range of heterogeneous works [START_REF] Garriga | Corporate Social Responsibility Theories: Mapping the Territory[END_REF], they all have a few points in common:

1 The concept of CSR has different origins, but many authors trace them back to a conception of business tinged with religious ethics in the United States at the end of the 19 th century [START_REF] Acquier | Les modèles de pilotage du développement durable : du contrôle externe à la conception innovante[END_REF]. For example, the term 'stewardship' referred to the moral obligation of all 'entrepreneurs' towards the society in which they worked and which they helped to enrich (Capron & Quairel 2010;[START_REF] Acquier | Les modèles de pilotage du développement durable : du contrôle externe à la conception innovante[END_REF]. With the emergence of the modern corporation at the beginning of the 20th century (Berle & Means 1932), entrepreneurs appeared to have more and more power, thus creating the need for greater controls on their relationships with society. Expectations regarding businessmen (cf. [START_REF] Bowen | Social responsibilities of the businessman[END_REF] gradually turned towards the firm and the legal entity it represented. For example, the notion of 'trusteeship' emerged: managers were entrusted with considerable powers, which could be withdrawn [START_REF] Davis | The Case for and Against Business Assumption of Social Responsibilities[END_REF]) by society. They were therefore obliged to live up to the confidence placed in them by society, legitimizing the modern corporation in the process.

• CSR focuses on what is expected of firms beyond their strict contractual obligations, i.e. beyond demands for economic performance and compliance with the law. This corresponds to the "voluntariness dimension" described by [START_REF] Dahlsrud | How corporate social responsibility is defined: an analysis of 37 definitions[END_REF], and to the main stages of Carroll's pyramid [START_REF] Carroll | Corporate Social Responsibility: Evolution of a Definitional Construct[END_REF]). We will use the notion of 'scope of attention' to cover this series of challenges that come in addition to those resulting from the contracts (entered into with shareholders, employees, the State, etc.,), which CSR is trying to make into a new management object.

• CSR research has striven to show that firms are able to pursue social and environmental objectives using a standard legal and economic framework. To demonstrate the compatibility of traditional economic reasoning and social responsibility, CSR was keen to adopt approaches underlining the strategic value of responsible behaviour, and highlighting a clear "business case" for social responsibility. From this angle, CSR consists in a mutual understanding of what is in the best interests of the corporation (and its shareholders).

• Finally, CSR research studied the practical means available to firms for indentifying and managing these new areas of attention and converting them into areas of responsibility. It then showed that the concept of 'stakeholders' [START_REF] Freeman | Strategic management: A stakeholder approach[END_REF] helped to operationalize the area of attention, especially by targeting the most affected, most influential and most 'critical' actors.

In this first part, we will progressively lay the building blocks of this common core of the CSR, before demonstrating in a second part that another theoretical path was possible. a) Beyond the sphere of contractual obligations, the sphere of attention As outlined very early by [START_REF] Votaw | Genius Becomes Rare: A Comment on the Doctrine of Social Responsibility Pt. I[END_REF]) and still discussed today (see for example (Lorenzo-Molo and Udani 2012)), the notion of "responsibility" for the firm is imprecise: it is unclear whether it includes the idea of legal liability, of responsibility in the ethical sense, or merely the idea of logical causality. In legal terms though, the firm is effectively committed to several parties, particularly through the agreements it has signed (with the shareholders, employees, etc.). But CSR focuses on so-called voluntary options, i.e. precisely those that go beyond compliance with the law and contractual obligations. "The idea of social responsibilities supposes that the corporation has not only economic and legal obligations but also certain responsibilities to society which extend beyond these obligations." [START_REF] Mcguire | Business and society[END_REF]) [START_REF] Davis | The Case for and Against Business Assumption of Social Responsibilities[END_REF] also proposed that CSR be defined as the attention and answers provided by the 'firm' to questions that go further than its strict economic, technical and legal obligations:

"It means that social responsibility begins where the law ends. A firm is not being socially responsible if it merely complies with the minimum requirements of the law, because this is what any good citizen would do."

This focus on 'voluntary' measures does not mean that the law has no part to play in the social movement, and that it has not changed. On the contrary, many works have shown how the law has evolved on social and environmental issues since the 1960s (law on minority groups, the environment, etc.). Importantly, research has shown that firms' pioneering decisions regarding social and environmental questions can come before new norms and have sometimes been the source of regulatory changes [START_REF] Ackerman | Corporate social responsiveness: The modern dilemma[END_REF]Bauer 1976, Rivoli and[START_REF] Rivoli | First They Ignore You…": The Time-Context Dynamic and Corporate Responsibility[END_REF] 2 . Yet, analysing these expansions in the normative field as ex post effects, CSR fundamentally refers to a non-codified space of interaction between the firm and the society in which it belongs. This space is neither that of legal constraints nor that of contractual obligations, although CSR includes voluntary societal norms. In the following pages, we use the term 'scope of attention' to cover the elements that the firm must take into consideration, beyond its economic and contractual relationships. This 'scope' or 'field' corresponds to what certain authors call the 'implicit' norms that society expresses regarding the long-term, informal power of the firm (Davis 1973, Donaldson and[START_REF] Donaldson | Toward a Unified Conception of Business Ethics: Integrative Social Contracts Theory[END_REF]. The notion of 'attention' is found in the works of many authors, including seminal papers such as those of [START_REF] Donaldson | The stakeholder theory of the corporation: Concepts, evidence, and implications[END_REF], [START_REF] Freeman | Strategic management: A stakeholder approach[END_REF] and [START_REF] Mitchell | Toward A Theory Of Stakeholder Identification And Salience: Defining The Principle Of Who And What Really Counts[END_REF]. We also find the term 'consideration' in the works of [START_REF] Davis | The Case for and Against Business Assumption of Social Responsibilities[END_REF] and(Donaldson andPreston 1995): "Each group of stakeholders merits consideration for its own sake and not merely because of its ability to further the interests of some other group."

2 It has also been shown that regulatory and legislative interventions can have a limited impact due to the dynamics of innovation and to 'shared uncertainties' (Aggeri 1998).

Fig. 1 -A reference model for the 'scope of attention' of the corporation b) The assumption of compatibility and the strategic value of attention

The reasons urging firms to act in a responsible way have changed greatly over the years.

Although managerial ethics are sometimes mentioned, the reason the most often used to justify the rationality of firms' responsible behaviour is the notion of 'strategic approach' [START_REF] Acquier | Les modèles de pilotage du développement durable : du contrôle externe à la conception innovante[END_REF][START_REF] Marens | Recovering the past: reviving the legacy of the early scholars of corporate social responsibility[END_REF]. This approach was strengthened in the period from 1965 to 1975 with the deep change in the socio-political context in the United States and the development of NGOs (increase in concern for social, environmental issues, etc.). It covers two partially overlapping arguments.

Recognizing pressure from civil society

The first premise imagines the firm's relationship with society as a form of implicit contract. Davis believed that the firm has power, granted to it by society; it can lose this power in the long term if society is not satisfied with it [START_REF] Davis | The Case for and Against Business Assumption of Social Responsibilities[END_REF]. In this way, the firm is committed by an implicit social contract [START_REF] Donaldson | Toward a Unified Conception of Business Ethics: Integrative Social Contracts Theory[END_REF], which guarantees its acceptability or legitimacy as long as it complies with its terms, i.e. that it adopts what is considered to be sufficiently responsible behaviour. This social contract is sometimes strongly backed up by institutional mechanisms [START_REF] Mullenbach | Les fondements théoriques de la responsabilité sociétale de l'entreprise[END_REF]) (world-scale normative organizations such as the ILO and ISO, non-government organizations, public authorities, etc.), which put de facto constraints on firms. The mechanisms do not challenge the legal framework of the firm but give weight to society's expectations. They build systems of reference, which, although proposed for adoption on a voluntary basis, should in fact be seen by firms as essential to their activities, granting them their 'licence to operate' [START_REF] Visser | The A to Z of corporate social responsibility[END_REF], or too threatening to ignore.

A mutual understanding of best strategic interest

The second premise does not assume that there is an implicit social contract but tends to bring social responsibility back into the traditional field of strategy. Since the 1970s, many works have sought to link social performance and financial performance [START_REF] Carroll | Corporate Social Responsibility: Evolution of a Definitional Construct[END_REF][START_REF] Margolis | Misery loves companies: Rethinking social initiatives by business[END_REF][START_REF] Wood | Measuring corporate social performance: a review[END_REF]. This research theme is still a major issue for business ethics, and authors have demonstrated that it is one of the most discussed topic in this field since 2006 [START_REF] Robertson | A Five-Year Review, Update, and Assessment of Ethics and Governance in Strategic Management Journal[END_REF]. Using other words, the literature on CSR has emphasized the term of 'business case for CSR', aiming at demonstrating that CSR should indeed be part of conventional strategic business cases because it is mostly profitable (for instance [START_REF] Crane | The corporate social responsibility agenda[END_REF], chap. 4, Carroll and Shabana 2010[START_REF] Wood | Measuring corporate social performance: a review[END_REF].

Finally, more generally speaking, stakeholder theory makes no a priori assumptions on corporate purpose, but simply invites firms to extend their traditional strategic reasoning based on the needs of the clients and shareholders to include all the groups, i.e. the stakeholders, that might have an impact on the future of the firm [START_REF] Freeman | Strategic management: A stakeholder approach[END_REF][START_REF] Mitchell | Toward A Theory Of Stakeholder Identification And Salience: Defining The Principle Of Who And What Really Counts[END_REF].

From this standpoint, the attention is guided by a mutual understanding of the best strategic interest and socially responsible behaviour is not incompatible with the traditional notion of generating profit. As summarized by (Munilla & Miles 2005), social responsibility is either an answer to pressure from society or a profitable strategy for the firm.

c) Operationalization of CSR: identifying the strategic stakeholders

Apart from justifying the socially responsible behaviour of firms, CSR research has also studied the practical means of managing the scope of attention [START_REF] Mullenbach | Les fondements théoriques de la responsabilité sociétale de l'entreprise[END_REF][START_REF] Carroll | The Business Case for Corporate Social Responsibility: A Review of Concepts, Research and Practice[END_REF]. The managerial focus was introduced in two stages, with the identification first, of the impacts of the firms' activities and second, of the strategic stakeholders firms should draw their attention to.

First restriction: the scope of attention as a set of impacts to be analyzed From Eilbert & Parker's notion of 'good neighborliness [START_REF] Davis | The Case for and Against Business Assumption of Social Responsibilities[END_REF]' ( , cited by Carroll, 1999) ) to the definition of CSR in the ISO 26000 norm published in 2010, we find the idea that the firm should manage the "impacts of its decisions and activities on society and the environment" (ISO 26 000).

The managerial approach was really developed and adopted from 1975 onwards (see [START_REF] Ackerman | Corporate social responsiveness: The modern dilemma[END_REF], changing the theoretical idea of 'responsibility' into the more experience-based notion of 'responsiveness', whereby a firm's sensitivity makes it respond to its impacts on society. More precisely, the Corporate Social Performance (CSP) approach of the period from 1980 to 1990 worked particularly on measuring these impacts and the results of actions taken by firms to reduce the negative or improve the positive ones. The 'social performance' framework [START_REF] Wood | Measuring corporate social performance: a review[END_REF], which grouped a number of theoretical streams that had previously been developed separately [START_REF] Garriga | Corporate Social Responsibility Theories: Mapping the Territory[END_REF], provided managers with the first set of coherent instruments for measuring the firm's potential 'impact area' and the effectiveness of strategies implemented by the managers to deal with it.

Fig. 2 -Instrumenting an "Impact area" to deal with CSR

Second restriction: from impacts to strategic stakeholders However, the key strategic and instrumental reference for CSR was the so-called stakeholder view (Clarkson 1995[START_REF] Dahlsrud | How corporate social responsibility is defined: an analysis of 37 definitions[END_REF], Freeman et al. 2010). In the terms used by (Carroll 1991), the approach helps put 'names' and 'faces' to the affected components.

Under stakeholder theory [START_REF] Freeman | Strategic management: A stakeholder approach[END_REF]Post et al. 2002), stakeholder management is vital to a firm's successful performance. The idea is to balance the expectations of any stakeholders that might be affected by the firm's activities. The theory therefore puts shareholders, employees and all the stakeholders on the same level, the shareholders being one party among others (Freeman & McVea 2001;Phillips et al. 2003). The theory is not only descriptive [START_REF] Donaldson | The stakeholder theory of the corporation: Concepts, evidence, and implications[END_REF] but also provides CSR with a analytical framework and a strategic aim. It is a question of measuring and managing the firm's impacts, especially the impacts on the critical stakeholders (see classifications of stakeholders according to their importance [START_REF] Mitchell | Toward A Theory Of Stakeholder Identification And Salience: Defining The Principle Of Who And What Really Counts[END_REF]Phillips et al. 2003)), which have the highest influence back on the firm's potential performance. More recently, an approach combining strategic relevance and stakeholders' prominence has been developed [START_REF] Bundy | Strategic Cognition and Issue Salience: Toward an Explanation of Firm Responsiveness to Stakeholder Concerns[END_REF] to specify the level of firms' responsiveness by classifying raising issues according to their 'salience'. Although sophisticating the description of the scope of attention and reaching predictability on firms' responses, this work does not fundamentally question the understanding of CSR as a response at a strategic level to issues raised by more or less critical stakeholders.

Fig. 3 -Scope of attention according to the stakeholder view

To summarize, we can identify several hypotheses that have guided CSR research:

-A scope of attention beyond the contracts. CSR conceptualizes a firm's 'scope of attention', referring to elements that exceed the perimeter of its contractual and legal obligations.

-An assumption of compatibility. CSR research tries to show that the scope of attention can be managed within the standard contractual framework. It is compatible with the current legal and strategic framework.

-Managing attention via the stakeholders The identification of the strategic stakeholders helps manage the scope of attention more effectively.

The above options are all the easier to understand when we remember that shareholder doctrines began to put heavy constraints on managers at the end of the 1970s. This context partially explains why the believers in voluntary ethics won the battle against those in favour of stricter controls on managerial behaviour. As Marens wrote, researchers specialised in CSR turned towards ethical paradigms, discarding the idea that "laws or regulations were necessary to constrain or channel corporate behaviour in the interest of social justice" [START_REF] Marens | Recovering the past: reviving the legacy of the early scholars of corporate social responsibility[END_REF].

There can be no denying that CSR has been widely implemented since then, with firms adopting its principles and its tools. Nonetheless, it was impossible to imagine certain alternatives within the CSR framework, as shown by several recent legal innovations.

II. Practice renews theory with "multi-purpose corporations".

In its search to encourage firms to have a positive social and environmental impact, CSR research could clearly have taken a different option, which is now emerging in the form of a practical invention. New legal forms of commercial companies were introduced in the United

States at the end of the 2000s, based on hypotheses and reasoning that had not been foreseen, let alone put forward by CSR research. Among these new forms, in this article we will particularly study Flexible Purpose Corporations (2012, California) and Benefit Corporations (2010, in Vermont and then around twenty other states).

In this section, we describe the rationale behind their creation. Our work is based on the legal documents published by California's Senate (discussions and their preparatory work, suggested proposals and amendments, letters of support and the texts adopted). We also studied the texts (white papers) used to promote the new forms with potential sponsors and the general public by explaining the reasoning behind their conception and their specific characteristics3 . Finally, we completed our study with a series of interviews with the key actors responsible for drafting the bills in California. We were able to retrace with them all the alternatives that were rejected, the obstacles, and the reasoning that led to the current texts, and thereby check that our modelling was well-grounded.

a) Changing a firm's corporate purpose

Although the new forms of company appear to be identical to traditional corporations, a highly original provision is included in the legal specifications: a social and environmental purpose is stated in the firm's articles of incorporation. This purpose, which is as equally legally binding as profit goals, must be approved by at least two-thirds of the shareholders.

The aim of these new forms of corporation is therefore similar to that sought by CSR. But, to ensure that the corporation's interests are compatible with those of society, the new companies make amendments to the law. When the corporate purpose is added to the articles of incorporation, it transforms the managers' obligations (or 'fiduciary duties' in American law) with respect to the contracting parties, in this case the shareholders. This conception is therefore different from the previous hypothesis of a scope of attention extending beyond the sphere of the contracts.

The promoters of these forms of company reasoned in a very different way from CSR researchers as, rather than asking why certain firms implement CSR policies, they tried to understand why willing entrepreneurs were unable to do so. Some lawyers (e.g. Mac Cormac and Haney 2012) describe the experiences of company managers and future entrepreneurs who are keen to make a positive contribution to society but who are unable to commit themselves because of the prohibitively high personal legal risks involved. The law is in fact asymmetrical: although the managers can implement ambitious CSR policy as long as they have the shareholders' support, they can be suddenly prevented from doing so by a change in shareholders or in the economic context. From this angle, it is impossible to say that all the stakeholders have the same relationship with the company since, in the current state of corporate law, the shareholders can ask the managers at any time to refocus the strategy on their financial interests. From the entrepreneurs' point of view, implementing 'responsible' strategy can lead to the legal risk of failing to fulfill their obligations towards the shareholders.

And this risk is enough to discourage them.

When a corporate purpose is included in the companies' articles of incorporation, this changes these companies' governance. Although the broad lines of the shareholder model are retained, the articles of incorporation provide legal guarantees for managers, who are protected from derivative suits brought by dissatisfied shareholders, as long as the disputed decisions are in line with the stated corporate purpose. This corporate purpose forms an integral part of the articles of incorporation unless a two-thirds majority of shareholders vote to change it. It further prevents any mergers and acquisitions that are not in line with the stated purpose4 . In this way, it provides managers with a safe harbour for striking a balance between the corporation's different targets.

However, the corporate purpose does not give managers a blank cheque. A number of different management tools are used to assess its performance (third-party standards, compulsory reports, shareholders' obligation to implement, etc.). This potentially revises the entire system for assessing managers' performance.

b) Giving up the notion of compatibility

The notion of compatibility posited by CSR is no longer necessary in this case since, instead of trying to make responsible behaviour fit into standard economic reasoning, the companies explicitly pursue several corporate purposes. In this way, firms can adopt responsible behaviour without having to justify that it is compatible with traditional economic rationality.

It should be noted that this does not mean that they have to give up profit objectives.

Several previous legal innovations already enabled firms to explicitly pursue a social goal5 .

However, these forms were designed with the opposite reasoning: the idea was to give charitable associations the means of carrying out commercial activities and having access to private funds by allowing them to have a certain level of remuneration. But to guarantee the social purpose of these undertakings, the law chose to limit this remuneration (using the term 'low-profit') as if the two goals were to a great extent mutually exclusive. Flexible Purpose

Corporations and Benefit Corporations, on the opposite, do not fit into this 'charity' model and, for that matter, do not have tax incentives.

c) Extending the scope of attention beyond the strategic stakeholders

These new forms of company also break with the idea that the scope of attention should be limited to the strategic stakeholders. The definition of their social responsibility is broader than a simple 'correction' of the possible negative impacts of their activities. On the contrary, it opens up a wider reflection on how companies fit into society, by moving away from the fundamental dichotomy between profit goals and social goals. In particular, such companies are allowed to target a special positive impact or benefit (e.g. culture), for a public not expressly identified as stakeholders and not included in its 'impact area'.

The Flexible Purpose Corporation can define its scope of attention freely and independently and revise it with a two-thirds shareholder vote. As for the Benefit Corporation, its corporate purpose is contingent on choosing an independent standard to assess its social and environmental impact. The details of the said purpose (to create a general public benefit) then depend on these standards, which provide a range of alternative forms of instruments for the area of attention.

The new companies demonstrate several shifts from the three milestone proposals in CSR research:

-Rather than intervening 'beyond the contractual sphere', they amend the contracts; -Rather than accepting the notion that CSR is compatible with the traditional strategic rationale, they recognize that there can be several goals; -Rather than managing stakeholders, they manage the corporate purpose.

III. Discussion and conclusion. A new agenda for management research: coordinating attention and contracts in collective action

It is interesting to compare CSR research and the legal innovations in America, since it shows how very different paths can be taken from the same starting point, i.e. the goal of favouring companies' positive impact on society. It is obviously too early to say what impact the new companies will have and whether they will help meet the goal, in a better or a different way than the CSR approaches. In our view, it is more important to know how to avoid using theoretical frameworks that are restrictive and fail to either account for or favour different corporate strategies.

FPCs and Benefit Corporations are an opportunity to question the analytical frameworks used in management research. By reopening discussion on the legal framework of the firm, they reveal an option that has clearly been neglected by CSR, as its scope did not include changes in law. These innovations are an invitation for research to view legal options as managerial choices that should be included in their remit. Studying the legal frameworks can serve for new thinking on the interactions between contracts and strategic attention. We can illustrate this with two examples.

Corporate purpose: a forgotten dimension

If CSR was built on an attention-based model, it was doubtless as a reaction to purely contractarian economic interpretations, which sum up the company as a nexus of contracts.

This interpretation reduced corporate purpose de facto to shareholder profit maximisation [START_REF] Jensen | Value Maximization, Stakeholder Theory, and the Corporate Objective Function[END_REF][START_REF] Canals | Rethinking the Firm's Mission and Purpose[END_REF]. In order to lend new weight to society's expectations, various institutional devices were imagined to organize an area of attention providing counterpressure.

However, by focusing on the area of attention, CSR research denied itself the option of revising the existing legal and contractual framework. As a result, instead of moving on from the contractarian view, until these recent innovations the research seems to have remained a prisoner of a contingent representation of the firm: companies were thought of within a given legal framework. The exclusive control rights granted to the shareholders led to the idea that was quite natural for a company's aim to be profit maximisation (in the short or long term).

Consequently, although there was general agreement that the company could be a driving force for creating value and fighting against poverty, firms were primarily thought of in terms of the creation of value for shareholders. For many years, research was completely caught up in the question of knowing whether or not social and environmental performance had a positive correlation with financial performance [START_REF] Margolis | Misery loves companies: Rethinking social initiatives by business[END_REF].

In Margolis and Walsh's view, it was therefore essential to work on the theory with a view to understanding the role of the firm when confronted with what they called 'dueling expectations'. At present, it can be said that this work on the theory inevitably consists in bringing the legal framework back into the field of management research. At first sight, it might appear to be a minor issue to amend the corporate purpose in corporate law. But in fact it helps to change the representation of the firm and to consider that a corporate purpose is not necessarily limited to profit, but is an endogenous variable of corporate management. This is consistent with previous research that has shown that the 'purpose' or 'essence' of the firm should be reinstated and thought in line with an appropriate governance system [START_REF] Pitelis | The (new) nature and essence of the firm[END_REF]Teece 2009, Canals 2011).

Challenging the boundaries of commitment

Rather than thinking of attention as independent from the contracts, the new companies therefore propose a coupling model that changes the legal framework; by revising the contracts, they make strategic attention possible. This innovation reverses the traditional functioning of CSR: rather than seeking to widen the firm's commitment to its stakeholders (e.g. to NGOs) and to make sure that their interests are represented better, FPC and Benefit

Corporations revise the content of the commitments to parties with which they already have contracts. This reversal highlights the fact that the impasse for 'responsible' firms was not so much due to an absence of commitment on the outside as to a lack of commitment on the inside.

In the new firms, the shareholders commit to a series of goals, other than profit-making, that the company intends to pursue. In practical terms, this means that they authorize the managers to make decisions that serve these goals even if this might go against their immediate financial interests. Basically, this evolution may seem highly paradoxical, as it amounts to individuals agreeing to decisions being taken in their name although they might not serve their interests.

This paradox calls for several remarks: • First, it does not mean that all shareholders should be militants, seeking an impact on society rather than their own profits. In our view, it simply shows that up until now, the law could prevent people from being involved in a social or environmental process. In practice, they could initiate this process but they always ran the risk that, following a change of shareholders for instance, the managers would be asked to maximise shareholders' profits. There was a great lack of legal security simply due to the fact that, because traditional corporate contracts do not specify a variety of purposes, they do not prevent shareholders from only retaining one corporate purpose. The partners' lack of commitment could therefore be paralysing.

• The second remark is that the parties' commitment, or engagement, to the firm is doubtless a key foundation stone of the firm. It characterises the employment contract and the relationship of subordination: by accepting a relationship of subordination, employees accept the fact that management decisions affecting them can be taken in the collective interests, which do not necessarily match their own. R. Freeland gave a remarkable demonstration of this point: the law enables employees to make commitments and thus adopt behaviour that would be impossible to understand in a standard economic environment [START_REF] Freeland | The social and legal bases of managerial authority[END_REF]. Employees owe obedience to their employers and are required to act in the employers' interests and not in their own.

• Finally, there is a key challenge in terms of research. At this stage, the relationship of commitment is not very well understood and has not been theorised about. The For instance, it is clear that if managers are authorized to take any decision they like in the name of social interests, there may be abuses. In fact, this was the major criticism lodged

  For example, in 1963 McGuire wrote:

Fig. 4 -

 4 Fig. 4 -A model of the purpose beyond the scope of attention

  challenge consists in characterizing it. What relationship do the contracting parties have with the firm? How can this relationship of commitment be controlled? How can guarantees be given to the people making the commitments and what are their rights?A new research path: the dynamics of contracts and strategic attention in collective actionAs we have shown, with an innovative coordination between the spheres of contracts and of strategic attention, via a commitment to a common purpose, these new forms of company challenge management research and invite it to adopt a new position. Somewhere between the two extremes of a purely contractarian view and a view focused solely on attention, a new research space is now opening up to study the interactions between contract-and attentionoriented stances for building collective action. It is true that the innovative proposals leave a large number of questions unanswered.

  against the proposal to set up Corporate Constituency Statutes, a legal provision that was the forerunner of the FPC. In the 1980s, a wave of mergers and acquisitions in the United States led to considerable social damage, whilst leaving the states powerless to act. The Constituency Statutes were designed to authorize company managers to assess the impact of their decisions on an open list of constituencies (i.e. potential parties). It was severely criticized because there was a risk of it cancelling out the provisions of contractual agreements between the shareholders and the managers, giving the latter what was feared to be too much latitude with too few controls.Contrary to Constituency Statutes, corporate purposes delimit a framework. They also provide the basis for a tool for assessing managers' performance. What scope should they have and how should the assessment criteria be defined? Who should control them? The different legal options provide different answers to these questions. FPCs leave it to the partners to define the corporate purpose and simply demand regular reports explaining the strategy, resources and targets reached by the said purpose. On the contrary, Benefit Corporations cater for a very general social impact. They demand multi-criteria assessments, specifying that the latter should be carried out by independent third parties, but without describing the process.These are the different questions that management research should try to answer. How can the strategic attention dimension be included in the contracts so that it can be taken into account in practice? What is the potential and what are the difficulties involved in the different forms of company? Also, building on the American examples, what other legal forms can be imagined for firms?

For further details of these new forms, see http://benefitcorp.net/for-attorneys/benefit-corpwhite-paper and http://www.lawforchange.org/NewsBot.asp?MODE=VIEW&ID=4149 (consulted en September 2012).

In practice, there is a limit of two-thirds for each class of subscribed shares. A group of shareholders (e.g. the founders) can therefore prevent the corporate purpose from being abandoned if it represents two-thirds of a particular, expressly defined class of shares. In California, shareholders who disagree with the result of a vote benefit from dissenters' rights, which guarantee that their shares are bought back at a fair price.

For further information, see the UK's Community InterestCompany (2004), the American Lowprofit Limited Liability Company (2007) and the Belgian Social Purpose Company (1995).