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Social enterprises, management and governance

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The peculiarity of management of SE: the italian experience

The peculiarity of management of SE: the italian experience

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  • 1. The peculiarity of management of SE: the italian experience by Giacinto Tommasini and Donatella Martinelli Reproduction is yet authorized provided the source is quoted Social Enterprises and governance model
  • 2. Abstract of this presentation !  One of the aspects least focused upon in studies of Social Enterprises is governance, which is crucial when defining a type of governing system that could improve its efficiency and efficacy. The need to consider both social and economic aims in the decision-making process furthermore emphasizes the importance of stakeholder participation, accountability, and transparency. This document explores governance through an in-depth analysis.
  • 3. Defining Social Enterprise !  “Social Enterprise” is a broad term used to define economic businesses aimed at achieving social and collective objectives by means of an entrepreneurial organizational structure and system. !  These systems use the legal forms which are usually used by the private sector. !  They are also highly involved in providing services to the Public Administration, mainly in the fields of disadvantaged people integration.
  • 4. The main fields of SE In the European context, there are three main fields in which social enterprises perform their economic activity: !  work integration (WISE); !  enterprises whose primary aim is to produce goods and services with social utility or are driven by a collective interest; !  enterprises which foster local economic and social development (e.g., proximity services), through promoting citizen and local government participation in business management.
  • 5. Two concepts of SE !  The first refers to a more European concept of Social Economy, or Third Sector organizations. These organizations work to achieve social goals by means of an entrepreneurial activity that usually originates as a community project or is initiated by a collective action. !  The second, on the other hand, is more often found in the Non-Profit, Anglo-American context.
  • 6. SE in Europe Social entrepreneurs play the role of change agents in the social sector, by: !  Adopting a mission to create and sustain social value (not just private value); !  Recognizing and relentlessly pursuing new opportunities to serve that mission; !  Engaging in a process of continuous innovation, adaptation, and learning; !  Acting boldly without being limited by resources currently in hand; !  Exhibiting a heightened sense of accountability to the constituencies served and for the outcomes created”
  • 7. Three EU SE types Pure philantropy Hibryd Pure commercial Motives Goodwill Mixed motives Self-interest Methods Mission driven Balance of mission and market Market-driven Goals Social value creation Social and economic value creation Economic value creation Destinations of income/profit Directed to non profit organizations Reinvested Distributed
  • 8. Hybrid Spectrum of enterprises Traditional non-profit Non-profit with income activities Social Economy Socially responsible business Corps with social responsibility For-Profit
  • 9. SE in Italy In Italy there are different model of governance for social enterprises, but all characterized by following indicators: !  a high degree of autonomy; !  a decision-making power not based on capital ownership (“one head, one vote”); !  an initiative launched by a group of citizens; !  a participatory nature (multi-stakeholdership approach); !  a limited profit distribution.
  • 10. ForProfit – NonProfit in Italy Aim Ownership Governance Perspective For Profit Shareholders Stewardship Shareholders Non Profit Assets locked in Democratic Stakeholdesr
  • 11. Main features of NonProfit !  Enterprise Orientation - They are directed toward the production of goods and the provision of services to a market. !  Social Aims - They have explicit social aims such as job creation, training, or the provision of local services, or building skills in local communities, and their profits are principally reinvested to achieve their social objectives. !  Social ownership - They are autonomous organizations whose governance and ownership structures are based on stakeholder participation (e.g. employees, users, clients, local community groups and social investors) Profits can be distributed both as profit sharing to stakeholders or for the benefit of the community.
  • 12. The authors !  Giacinto Tommasini, gtommasini@adest.biz, master degreed in Padova (Italy) and further postgraduated in Milan (Italy), is a business lawyer specialised in corporate and social enterprises legislation, across Europe. He is consultant for the EU Commission, DG Freedom, Security and Justice, and and senior expert in designing and implementing EU programmes focused on Social Economy fostering and development. !  Donatella Martinelli, dmartinelli@adest.biz, master degreed in Padova (Italy), is a business lawyer specialised in corporate laws and strongly focused on co-operative companies. Consultant and lecturer for the benefit of social organisations in Italy and abroad.