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Year: 2020
Published in: VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations
Cited as: Bradford, A., B. Luke and C. Furneaux (2020). “Exploring Accountability in Social Enterprise: Priorities, Practicalities, and Legitimacy.” VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations 31(3): 614-626.

Abstract

This paper draws upon accountability and legitimacy theories to explore for what social enterprises are accountable, how they communicate accountability, and to what extent they publicly communicate accountability. Case study methodology was employed, examining four work-integrated social enterprises in Australia. Data collection involved interviews with managers of each social enterprise, and a review of various secondary data including social enterprise websites and internal and external reports. Findings reveal a temporal dimension of accountability, as social enterprises acknowledged their dual social and financial accountability, but prioritised financial over social performance. Communication of social performance was limited, with publicly available reports partial and selective in nature. Communication of financial performance was even more limited, reporting typically directed to internal stakeholders. Implications include the need for social enterprises to communicate social and financial performance more broadly, in order to advance their legitimacy from moral (based on intentions) to consequential (based on achievements).

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Future Research

Future research exploring other mechanisms of accountability will provide further insights into an area of limited understanding and research. Effective ways to enhance accountability are central to social enterprises’ legitimacy, particularly as the sector continues to grow. While social enterprise is a nascent field, as the sector matures, established norms will emerge. However, if no reporting is an accepted norm, and the broader public is not considered ‘‘relevant’’ to social enterprises’ reporting, the legitimacy of the sector and its potential contribution may not be realised to effectively address the intended social issues.

Policy Makers

Effective ways to enhance accountability are central to social enterprises’ legitimacy, particularly as the sector continues to grow. While social enterprise is a nascent field, as the sector matures, established norms will emerge. However, if no reporting is an accepted norm, and the broader public is not considered ‘‘relevant’’ to social enterprises’ reporting, the legitimacy of the sector and its potential contribution may not be realised to effectively address the intended social issues.

Support Organisations

Effective ways to enhance accountability are central to social enterprises’ legitimacy, particularly as the sector continues to grow. While social enterprise is a nascent field, as the sector matures, established norms will emerge. However, if no reporting is an accepted norm, and the broader public is not considered ‘‘relevant’’ to social enterprises’ reporting, the legitimacy of the sector and its potential contribution may not be realised to effectively address the intended social issues.

Social Entrepreneurs