Developing social business governance

A fundamental component of success for a social business is the strength of its governance.

Governance is the systems and processes concerned with ensuring the overall direction, supervision and accountability of an organisation.  

The most efficient way to ensure and maintain the strength of your governance is regularly providing training, information and support to all those involved.  


Developing the members of your social business 

The role of the members is important here. Members in this instance is taken to mean 'those with a vote', who have the power to change the governing documents, make and change corporate policy and elect (or fire) directors. The governing document defines who qualifies for a membership, but the methods of application, acceptance and inductions are a matter of policy and procedure.

This gives a social business considerable room for manoeuvre when it comes to setting probationary periods and a process for induction providing information about the social business over which they are acquiring so much power, as well as training and education on their role.  

 

Developing your social business Board of Directors 

The appointment of directors is usually from amongst the membership, so a quality process for recruitment and induction of members means that your social business is half way to having an appropriate pool from which to elect those directors (or equivalent).

In the case of a social business collective, the qualification for membership must include qualification for directorship. 

The roles of member and director are different and, as such, require different job descriptions and training plans. All directors have general responsibilities (codified in the 2006 Companies Act). Regulators provide organisations with additional legal status, such as financial service organisations or charities, with additional codes of conduct and advice on their job role. 

Other contributions to good governance

Outside of the forums of membership and directors, there may be other ways of mobilising contributions to good governance. Some social businesses make use of sub groups and working parties, often led by a director with co-opted contributors, to assist with the oversight of particular functions, projects or the development of products and services.

Others social enterprises use expert groups and/or user forums to provide additional monitoring of service provision as well as feedback and advice to the Board. Again, it’s is important to clarify the function of sub groups and forums by providing detailed job descriptions. Unless the governing document or the Board delegates specific power to these groups, they are advisory in nature.  

Download our questionnaire to help you get started with developing the capacity of your governance: