In the video we heard the TWO social enterprise governors discussing their own different approaches to governance, such as: TBD
The role of Governance of a social enterprise is to safeguard the Mission [or purpose] of the enterprise while Leadership should enable the management team in meeting or exceeding the demands of stakeholders as investors, employees, clients and beneficiaries, as well as comply with public policies and regulations. Leaders are thus considered in this respect as operationally driven, while governors act as controllers of the enterprise.
This module recognises that no single Governance or Leadership structure fits all social enterprises. Rather, Governance through Leadership should be agile thus ready to adopt new practices and adapt to the changing needs of the management team.
Governance provides strategic direction for leaders, helps them to foster commitment, shared aims and shall hold people to account. Governors define the rules, provide advisory functions and enforce the rules.
Leadership contributes to effective governance by promoting interagency collaboration, shared understanding and clear roles and responsibilities. Leaders will make things happen and put strategy into practice.
Exploring the Twelve Principles of Good Governance Presented by the Council of Europe:
Good Governance – the responsible conduct of public affairs and management of public resources is encapsulated in the Council of Europe 12 Principles of Good Governance.
Although these governance guides and toolkits are primarily directed toward local authorities and public services, they can be used by anyone as guiding principles. These 12 principles of good governance have been discussed in detail and the Council of Europe provide toolkits in their open access platform.
The Principle of Good Governance
Example of the Principle of Good Governance in Practice
Participation, Representation, and Fair Conduct of Elections
A social enterprise should clearly define and work by the methods to which governors or trustees are selected and organised.
If governance of the enterprise is under question by a whistle-blower, then timely and adequate response should be given to all stakeholders.
Efficiency and Effectiveness
Governors meetings can be regularly timetabled and appropriate meeting remits prepared with minutes of meetings published promptly after meetings.
Openness and Transparency
Governance successes, failures, practices, protocols and processes can be published at an annual review or posted regularly for public review.
Rule of Law
Clearly defined statements that compliance to legal requirements is mandatory and legal compliance checks are carried out regularly.
The governing body could produce its own Ethical Conduct Policy and also approve Ethical Conduct Policy for the social enterprise.
Competence and Capacity
Governors should be able to demonstrate their competence to carry out their role and availability to attend meetings, to research and prepare reports
Innovation and Openness to Change
The governing body of a social enterprise should have mechanisms in place to identify factors affecting change and issues impacting on the organisation and prepared to accept the need for change
Sustainability and Long-Term Orientation
Investment decisions should consider the ability to fulfil current demands and provide for business continuity and be risk based
Sound Financial Management
Financial protocols should be adhered to and a basis of financial planning, implementation and control should lead to financial improvements
Human Rights, Cultural Diversity and Social Cohesion
Policies and procedures should be in place and approved by the governors to ensure all rights are met
Who is accountable for what should be documented in policy statements. In general, an organization is accountable to those who will be affected by its decisions or actions as well as the applicable rules of law.