3.1.4.3 Other types of stakeholder participation in decision-making processes

In the context of social enterprises, a ‘stakeholder’ can entail any group or individual who can affect or is affected by the achievement of a social enterprise’s purpose. The emphasis is put on the external stakeholders of a social enterprise, such as supporters, clients and beneficiaries.1 According to the VSO legal regime, cooperatives with a social purpose are not required to include in their AoA provisions regarding stakeholders (other than employees), e.g. which allow stakeholder participation or provide membership rights/shares to various kinds of stakeholders. Based on our interview data, we can identify cooperatives with a social purpose with the following attitudes as regards stakeholder participation in the decision-making processes.

(i) Cooperatives with a social purpose, which are keen to allow stakeholder participation in the decision-making processes by implementing provisions regarding membership rights/shares in the AoA as well as by allowing stakeholder participation through informal processes. It has been already explained how students-volunteers have access to decision-making processes at CORE. In addition to students-volunteers, clients and customers are invited to purchase Type B shares (Interview with SJ, 16 February 2015). For CORE, it is important that the projects that are executed either stem from clients or are directed to clients, which are or aim to become a member/shareholder (Interview with SJ, 16 February 2015). Upon a request for a new project, CORE invites the new client to join the cooperative as a member/shareholder. Membership/shareholdership confers to such client formal power to participate in the decision-making processes because it will have the right to vote in the general assembly and to elect and appoint representatives for the board of directors.

Furthermore, both students-volunteers and clients, besides being allowed to participate in formal decision-making processes, can also participate in informal meetings. Students-volunteers and alumni at CORE can participate in monthly Type C member/shareholder meetings to discuss ideas, problems, strategies or claims with their representatives in the board (Interview with YG and G, 13 November 2015). Existing clients or prospective clients at CORE can participate in monthly thematic events organised by CORE’s students-volunteers. During the thematic-events the progress of CORE’s projects is explained with reference to the specific social mission that CORE’s projects address, e.g. rational energy consumption, mobility or sustainable energy in housing. Hence, knowledge is shared between the existing and potential clients and the cooperative’s members/shareholders. They all are interested in adopting a multi- stakeholder approach and support the social mission of CORE (Interview with JW, 13 November 2013). At CORE, the application of democratic procedures between shareholders, directors and employees/volunteers is a crucial issue. The principle of democracy is not only reflected in the application of the 10% voting cap but also in the open and participatory decision-making processes, in which employees and stakeholders can equally contribute. Furthermore, the communication between the members/shareholders is open and informal (Interview with GY and G, 13 November 2014; Interview with SJ, 16 February 2015). A student-volunteer at CORE was allowed to attend the meeting of the board of directors as a visitor in order to finally decide on the advantages of becoming a member/shareholder (Interview with G, 13 November 2014). Stakeholders perceive that they influence decision-making both directly and indirectly by sending emails, by reporting on projects, by voting, and by communicating directly with directors. At CORE, there is no decision made either by the board of directors or the general assembly that remains secret from employees or stakeholders (Interview with SJ, 16 February 2015). The managing director of CORE mentions ‘when a meeting is finished, I don’t mind to tell everything. Before a meeting, I’m always trying to ask everybody what their opinion is’ (Interview with SJ, 16 February 2015; Interview with YG and G, 13 November 2015). Between the members/shareholders, this is a feeling of trust and respect because communication is open.

(ii) Cooperatives with a social purpose which are keen to allow informal stakeholder participation or self-selecting representation of stakeholders in the decision-making processes but which are not keen to allow in the AoA for the provision of membership rights/shares to any type of stakeholders. Those cooperatives with a social purpose, have stakeholders who cannot influence the decision-making formally, e.g. by the exercise of voting rights. However, they can do so in an indirect way through informal means of communication, e.g. by the involvement of intermediaries, such as managers or self-selected representatives/directors who are not members/shareholders. We found an example thereof at Microstart, where employees and volunteers have never attended physically any meeting of the board of directors. However, they communicate their interests to intermediaries and trust their representatives at the board level (Interview with CO and interview with LH, 16 June 2015). They also feel that they actually influence decision-making. For instance, Microstart employees contributed substantially to the decision-making process regarding the modification of Microstart’s business plan. Initially, Microstart’s business plan was perceived by Microstart employees to be ambitious including very high objectives in terms of numbers of microcredit and returns (Interview with CO, 16 June 2015). The business plan was transplanted from the French practice and was not really adapted to the Belgian context. Microstart employees managed to communicate with the board of directors that it was not feasible to achieve the objectives in the due time. Furthermore, employees and volunteers at Microstart indicate that they trust the members of the board of directors because governance decisions comply with the social objectives of the operational part of the cooperative (Interview with CO, 16 June 2015; Interview with E, 13 November 2014). The board of directors serves its role to equally guarantee the social and the financial objectives of the cooperative: (i) the financial objectives are safeguarded by directors who represent the main financiers of Microstart, i.e. BNP Paribas Fortis and the EIF; and (ii) the social goals of Microstart are safeguarded by directors who are representatives of the non-profit organisation Adie. Even though physical contact between the board of directors and employees or volunteers is not regular, meetings and informal discussion take place between volunteers, employees, managers and directors (Interview with CO, 16 June 2015; Interview with LM, 13 November 2014). One Microstart employee mentioned that although employees, volunteers and managers are invited to meet and discuss with the board members, there is however still the perception that in respect of certain information and decisions, the board members are not allowed to disclose any information. But generally, communication at Microstart between the board members, managers and employees is relatively open. Information in the form of a newsletter is distributed weekly to employees and managers regarding the operational activities of Microstart (Interview with CO, 16 June 2015). Annually employees are provided with access to financial information. Other information is disseminated to employees and other managers, e.g. decisions that have been taken by the board of directors and/or the general assembly. One Microstart employee mentions ‘if there is a decision which involves everybody, everybody is going to receive the information.’ (Interview with CO, 16 June 2015). The Microstart website also contains information accessible for stakeholders, including newsletters, annuals reports, financial statements and organograms.

Besides employees and volunteers, also customers can influence indirectly the decision-making processes at Microstart. Annually, Microstart organises a client satisfaction survey. Questions are submitted to clients with respect to: (i) their level of satisfaction with the services that Microstart provides in terms of microcredit and support; (ii) the level of satisfaction with the interest rate that Microstart applies to its microcredits; and finally (iii) the level of satisfaction concerning the contact with Microstart’s advisors and consultants. Additionally, Microstart organises informal events where clients are invited to evaluate and discuss Microstart’s services and activities. For example, a Microstart employee mentions that meetings are organised with clients in the same sector. It is also common practice at Microstart to involve clients in the operational decisions (Interview with CO, 16 June 2015).

At Volkshuisvesting, both the employees and the tenants of the social housing units are not allowed to acquire membership rights/shares nor to participate in the decision-making processes. The reason hereof lies in the provisions of the Flemish Housing Code of 1997, which bar the issuance of employee and stakeholder membership rights/shares (Interview with MP and S, 18 February 2015; Interview with IGT, 19 February 2015). The Flemish government, any province, any community, and any public institutions for social welfare are considered the only stakeholders that are allowed to participate in the decision-making processes through the exercise of membership rights/shares. Even though specific types of stakeholders, i.e. employees and tenants are not allowed to participate formally and directly in the decision-making processes, they can still participate in informal meetings (Interview with MP and S, 18 February 2015). At Volkshuisvesting, employees can participate in staff meetings. The outcome there of is communicated informally with the managing director of Volkshuisvesting and the President of Volkshuisvesting (Interview with MP and S, 18 February 2015; Interview with IGT, 19 February 2015). Furthermore, Volkshuisvesting also organises meetings with the tenants of the social housing units – directly or via the tenants committee. The tenants and their representatives are allowed to propose ideas for the improvement of the housing units. They can also submit claims and complaints. The tenants’ committee comprises at least four members. A delegate from Volkshuisvesting participates as a member of the committee. The tenant committee is allowed to make proposals and submit requests. The managing director of Volkshuisvesting has the responsibility to forward these to the Volkshuisvesting governing committee, which will deal with such proposal, claims and complaints.