On March 19, the Social Enterprise Association (SEA) announced the launch of a Primer on Governance for Social Enterprises in Singapore at the Singapore Management University.

With a national mandate to promote social entrepreneurship and build capacity for social enterprises, the SEA aims to help social enterprises build its knowledge on good governance practices.  It has published a primer and will also run regular workshops to assist social enterprises on how they can think about relevant governance issues and how to address them through the adoption of specific governance structures and practices.

According to the SEA, a social enterprise refers to any non-profit, for-profit or hybrid corporate form that uses market-based strategies to advance a social cause.  Like any other business, it aims to create surpluses, but seeks to reinvest those surpluses to achieve its social objectives.  Social enterprises are not businesses driven by a need to maximize profit for their shareholders or owners.  Since social enterprises can take on different forms, this should not become their defining characteristic.  They can be private companies, company limited by guarantee, limited liability partnerships, or cooperatives.

The Social Enterprise Committee published a report in 2007 that identifies four broad models of social enterprises found in Singapore today.

1. Work Integration Model – The Work Integration SEs (WISEs) provide skills training and/or employment opportunities to the needy disadvantaged (i.e. those who have higher than usual barriers to employment, such as ex-offenders) as a means to reintegrate them into society and encourage them to be self-reliant.  They give an opportunity to people who may not find employment on the open market.

2. Plough-back-profit Model – The objective of these social enterprises is to generate profit to fund the social programmes of their affiliated or parent charities.  This helps Voluntary Welfare Organisations (VWOs) or charities reduce their reliance on donations and enhance their financial sustainability.

3. Subsidised Services Model – These social enterprises provide subsidized services to needy and/or disadvantaged clients, and charge commercial rates to mainstream customers.  This ensures that the people who could not usually afford certain services have access to such services to improve their quality of life.

4. Social Need Model – These social enterprises are designed to serve society’s social needs or address certain social issues. These issues can include community bonding, family bonding and racial harmony.

Given the diversity of the social enterprise sector and numerous organizational forms, there is no one fixed standard of governance that will apply across the board.  Yet there is a case to achieve transparency on governance structures and processes.  Supporters of social enterprises want know how the social benefit or impact that is promised is delivered.  Impact investors take track records of good governance as a critical factor in providing grants and equity support in developing firms.

About Social Enterprise Association

The Social Enterprise Association is an umbrella organisation tasked with the role of promoting social entrepreneurship and social enterprise in Singapore, so as to bring about positive social impact and an inclusive community among Singaporeans.  It will focus on supporting peer-learning within the social enterprise community, providing capacity-building programmes and business services, and fostering synergistic partnerships among key stakeholders, namely government, businesses and people sector to build up individual enterprises and the sector at large.