The Governance of Social Enterprises: Managing your Organization for Success

Abstract

Governance of a social enterprise, if incorporated well, helps safeguard the mission of the enterprise while allowing the management team to meet the demands of such various stakeholders as investors, employees, clients and beneficiaries, as well as comply with public policies and regulations.

Yet few social enterprises use governance as a means to reach their highest potential. Likewise, board members of social enterprises often feel that they have more to offer than the social enterprise currently engages them. This is an egregious missed opportunity.

No one governance mechanism fits all social enterprises. Rather, governance should be dynamic and adapt to the changing needs of the management team, the operating and regulatory environment, and the larger goals and vision of the social enterprise over its lifespan.

With this in mind, the Schwab Foundation for Social Entrepreneurship, along with the Technische Universität München and the European Business School, has created a guidebook for social entrepreneurs on corporate governance.

The guidebook offers practical advice on how to design governing boards and committees, what can be done with existing structures once set up to ensure they best serve the social enterprise, and how to transition effectively the governance structures as the needs of the social enterprise change.

It also offers social entrepreneurs an opportunity to evaluate the needs, focus and personality of their social enterprise with the aim of determining which systems, processes, mechanisms and structures of governance will help their organization achieve its goals.

Keywords: Social Entrepreneurship, Corporate Governance