3.1.1.2 The legal factor of governance in tailor-made legislation for social enterprises

Lambooy and Argyrou, elaborating on the legal factors that characterise tailor- made and enabling legislation for social enterprises, identified that the legal factor of governance is a crucial one.1 They revealed that governance has a particular meaning within the existing tailor-made legislation. Primarily, governance reflects the decision-making power of participants in the function of the social enterprise which is not per se based on capital ownership.2 Most importantly, governance entails the role and the legal rights of the various categories of stakeholders in the decision-making processes of the tailor-made legal forms for social enterprises.3

Legislation provides particular rights and obligations to decision-making bodies in social enterprises. We note, however, that there are various tailor-made legal forms for social enterprises in the different EU Member States. Thus, the rights and obligations for the governance organs of social enterprises vary in the different national contexts. The emergence of tailor-made legislation for social enterprises is a milestone in the development of social enterprises. However, legal theory regarding the governance of the newly introduced tailor-made legal forms for social enterprises is still underdeveloped. In its definition for social enterprises in the SBI Communication of 2011, the European Commission mentions a uniform criterion that applies to the governance of social enterprises. According to this criterion, social enterprises are ‘managed in an open and responsible manner and, in particular, involve employees, consumers and stakeholders affected by its commercial activities’.4 However, according to the mapping report on the ecosystems of social enterprises ‘important differences remain, especially with respect to the interpretation and relevance of the ‘governance dimension”, even in countries with tailor-made legislation for social enterprises.5 Thus, we hypothesise that the rights and obligations that tailor- made legislation for social enterprises provides to the governance organs of social enterprises primarily vary on a national level, and secondarily differ gfrom ordinary governance schemes for commercial enterprises in the sense that they safeguard open, transparent and participatory decision-making processes. The various rights and obligations that national tailor-made legislation confers to the decision-making organs of social enterprises, as well as to the different types of stakeholders, need to be theoretically elaborated and empirically examined. Theoretical elaboration will generate the foundations for the development of legal theory relevant to the newly introduced tailor-made legislation for social enterprises whereas empirical examination will contribute to the existing theoretical discussion regarding the governance of social enterprises and the participation of stakeholders.