Choosing sides: contrasting attitudes to governance issues in social firms in the UK

The purpose of this paper is to outline the findings of a quantitative study of Social Firms between 2006 and 2007. In doing so, it examines the challenges that boards and managers in these organisations face. In order to test propositions developed from a review of the social enterprise (SE) governance literature, the paper adopts a quantitative, survey-based approach. The survey compared attitudes to governance issues among managers and board members in the UK-based Social Firms. Statistical analysis of the findings highlighted some key outcomes, particularly regarding legitimacy, accountability and stakeholder inclusion of Social Firms Boards. Furthermore, the paper identifies divisions between managers and board members regarding the enterprise-orientation of Social Firms. The research adds to current sector debates concerning SE identity, especially related to the effectiveness of governance systems, the erosion of underpinning social values and the adoption of a keener enterprise focus. While the research signals key variables such as legitimacy, accountability and democracy, much larger, qualitative-based studies are required that capture the voices of more SE boards. The key practical outcome from this small-scale study is the difficulty faced by SE practitioners in managing the governance process. There are many forces pulling the SE sector (political, economic and not to mention social) and these undoubtedly have an impact at the grassroots level. Having drawn conclusions on the key areas of significant difference between internal actors in Social Firms, it is vital not to forget that organisational governance does affect social beneficiaries. In the case of Social Firms, social beneficiaries are also bound together within the fabric of the organisation, forming part of the workforce as well as benefitting from access to employment. This presents problems for SE management, especially when diverging attitudes detract from, rather than enhance, social benefit. The paper presents some new empirical support for many of the governance challenges facing SE practitioners in the UK. The paper contributes to knowledge by providing support for the debates concerning SE governance, identity and legitimacy