<p>This paper is about the composition and function of boards of social enterprises. A social enterprise can be defined as a company, which is founded by users or external stakeholder in order to create jobs (or a work place), a meaning in live or to further integration. One tries to achieve this goal by a business activity and/or subsidies and/or neighbourhood projects. The amount of social enterprises grew steadily after the restructuring of social welfare in Sweden since the 1980. Alternative forms of welfare – such as a social enterprise – will probably grow further in importance. Thus, certain questions arise: Who controls such companies? How and by whom are these companies managed? How can social enterprises survive in an uncertain and fast changing environment? Most Swedish social enterprises take the incorporation form of a social co-operative (ekonomisk förening). They have as such a mandatory board, democratically elected by their members at the annual general meeting.</p><p>I used two contrary scientific theories, which try to answer the question: “What is a board there for?” One answer was that a board is there for the company and acts as an important instrument for the acquisition of resources, for the strategic development of the company and for the company’s contacts and representation to the outside (resource-mobilization-theory). The second answer was that a board is the most important instrument for the owner or stakeholder to control the company and/or to participate in it (principal-agent-theory/multi-stakeholder-theory).</p><p>Both theories suggest a board composed of different stakeholders and the enterprises own representatives (such as members and CEO). Those stakeholders want either to increase their insight and influence in the enterprise, or the enterprises’ management understood the possible value added, which could be achieved by including active external stakeholders into the work of the board.</p><p>Using a European study (PERSE-project) as a base I interviewed all 15 Swedish social enterprises which participated in the study. The analysis led to the finding that 9 of 15 companies (60 %) do not have external stakeholders with voting power in their boards. Only members of the co-operative could become a board member with voting rights. Board meetings are seen as an unpleasant formality. I call such a board composition “classical co-operative”. External stakeholders do not participate in the company and the company does not actively use of the board as an instrument.</p><p>Only 6 of the 15 social enterprises (40 %) have a board composition which I call “internal-external” and which is consistent with the above theories. Such a structure combines internal board members (members of the co-operation, management) with external stakeholders - either as board members with voting rights or as adjunct board members.</p><p>I was unable to answer the starting question (”what is a board there for”) in those 6 cases. It remains unclear if the board is used as an active instrument in gaining resources (board is there for the company) or if it is there for to represent external stakeholders and to safeguard there interests.</p><p>There might be a possible connection between the founders of a social enterprise and the board composition. A significant number of companies founded by users chose a classical co-operative board.</p>
| Identifer | oai:union.ndltd.org:UPSALLA/oai:DiVA.org:sh-249 |
| Date | January 2005 |
| Creators | Levin, Michael |
| Publisher | Södertörn University College, School of Business Studies, Huddinge : Institutionen för ekonomi och företagande |
| Source Sets | DiVA Archive at Upsalla University |
| Language | Swedish |
| Detected Language | English |
| Type | Student thesis, text |
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