Governance in Social Enterprises

Abstract

Social enterprises—organisations that pursue a social mission using market mechanisms—are promising vehicles to create both social and economic value for society. Navigating and/or aligning multiple goals and interests of stakeholders is critical for them to avoid mission drift, i.e. losing sight of their social mission, while navigating market and political pressures. Governance has been identified as a key mechanism that helps social enterprises to thrive as hybrid organisations, fulfilling multiple goals and attending to demands of multiple stakeholders. In this chapter, we review canonical theoretical approaches on corporate governance and assess their usefulness to understand governance of social enterprises. We highlight productive angles to examine social enterprise governance and provide first empirical insights on how social enterprises are governed in order to inform future research in this domain.