Identifying the owner of a social business

Social business are owned by those communities that benefit from the social causes these businesses have been set-up to address.

This is the second of the 10 key principles of social business.

There will be a core group, which I'll refer to as the leadership group, that run the social business, and may have even invested start-up capital.

The leadership group is responsible for giving the social business its direction, in terms of strategy and tactics to delivery, but they should not have ultimate ownership of the business.

If they did won the business there could then be a conflict between their, typically financial, needs and those of the communities that benefit from the social causes.

Social, or environmental, objectives need to be set-up, which will guide the leadership group and ensure that resources (finances, systems, people, etc) are aligned to the social causes .

Adhering to the social objectives ensures that shareholder (i.e. the leadership group) wealth maximisation does not overrule the social causes that the business was set-up to address.

So although the leadership group (ofter social entrepreneurs) give direction and run the social business, it's the beneficiaries of the social causes that are the owners of the business.


Mike.