topic 3

Miriam Wolf and Johanna Mair, in their paper, focus on social enterprises that assume for-profit, non-profit or new hybrid legal forms rather than social enterprises that operate as cooperatives. While cooperative types of social enterprises can be found in southern European countries like Italy, Spain, Portugal and France, in other countries like Germany, Sweden or the UK, they provide a smaller share of this type of organizations.
Figure 4 introduces the particular characteristics of social enterprises and contrasts them with for-profit and non-profit characteristics.

Figure 4. The characteristics of social enterprises with respect to for-profit and non-profit characteristics. (Miriam Wolf and Johanna Mair, 2019)
source:freepik.com

The role of governance systems in a changing environment

Can the boards react and respond to the impact of global changing initiatives and the forces of social change?
What is the role of advisory boards and supporting committees within a social enterprise?

Fig 5. The evolution of board function and strategic emphasis. (Miriam Wolf and Johanna Mair, 2019)

We find that, in the starting phase, social enterprises focus more on activities and operations of the organization and have the tendency of not treating governance as equally important. This often generates problems at later stages of development when challenges emerge and the organization lacks a mechanism to steer, provide direction and feedback. This may also be connected to the fact that available funding for social enterprises is not allocated primarily for governance and matters of internal organizational development, which limits the capacity of social enterprises to concentrate on these issues. Providing more support for organizations to establish adaptive governance structures and practices that may support them in times of growth, change and crisis may contribute to making social enterprises more successful and less prone to mission drift. Providing this support from the starting phase can help the organization adopt measures that can substantially influence its trajectory

Towards Improved Governance:

  • Good governance is responsive to the present and future needs of the organization, exercises prudence in policy setting and decision-making, and that the best interests of all stakeholders are taken into account.
  • Good governance is an ideal that is difficult to achieve in its totality. Governance typically involves well-intentioned people who bring their ideas, experiences, preferences and other human strengths and shortcomings to the policy-making table.
  • Good governance is achieved through an on-going discourse that attempts to capture all of the considerations involved in assuring that stakeholder interests are addressed and reflected in policy initiatives.
  • It makes sense to have governors and for most social enterprises a board of governors or a board of trustees are established and if they are not, they should be as a matter of priority.
Table 1. Passive and Proactive visions of governance

There is a lot of evidence from organisational behaviour studies that suggest a focus on small wins can aid successful delivery of an organisations mission, provide sustainability and encourages commitment to a shared purpose.