Social enterprises in the EU (IVOR nr. 111) 2018/2.6.4:2.6.4 Intermediate comparative conclusions: accountability and responsibility of social enterprises in the Belgian, Greek and UK social enterprise law

Social enterprises in the EU (IVOR nr. 111) 2018/2.6.4

2.6.4 Intermediate comparative conclusions: accountability and responsibility of social enterprises in the Belgian, Greek and UK social enterprise law

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Table 2.3: Accountability and responsibility in Belgian, Greek and UK social enterprise law

Belgium

Greece

UK

Social reporting requirements

Mandatory reporting indicators:

expenditure on investments company’s operating costs remuneration of directors to pursue the social purpose

Not stipulated mandatory reporting requirements but random reporting requirements. Random ad hoc audits by the Registry during which any Koinsep should account for its activities

Mandatory reporting indicators:

activities that have benefitted the community stakeholder consultation transfer of assets directors’ remuneration, pensions and compensation

External control and supervision

Belgian courts

Registry

Regulator

To conclude and compare, with respect to the legal label of accountability and responsibility all the examined legal frameworks contain mechanisms imposing transparency obligations. For example, they require, governing bodies of social enterprises to report or carry out random audits regarding the entrepreneurial activities and the use of financial resources for the fulfilment of social objectives (Table 2.3). The UK and Belgian legal frameworks oblige the directors of the CIC and the VSO to submit annual social reports integrated that demonstrate how the social purpose is achieved. In both countries, the social report is standardised and is based on various indicators (Table 2.3). The reporting indicators mainly focus on the allocation of financial resources to the fulfilment of the social purpose (five out of seven indicators in Belgium and in the UK). Greater extensive reporting obligations were identified only in the UK legal framework. Those covered the CIC’s entrepreneurial activities, the pursuit of social objectives and/or the transfer of assets. Additionally, of the three examined legal frameworks, only the UK legal regime encouraged social enterprises to report on information regarding the consultation and engagement of stakeholders prior to decision-making. A similar encouragement is not found in the Greek legal framework, in which the issuance of a social report is not mandatory. Unlike the Belgian and UK legal frameworks, the Greek legal framework places the affairs of the Koinsep under the scrutiny of an external institution, i.e. the Registry, in the form of ad hoc audits that are not standardised but vary subject to the competence of the Registry.

Finally, all the examined legal frameworks stipulate external control mechanisms that scrutinise the activities of social enterprises with regard to the pursuit of the social purpose. The mechanisms vary per jurisdiction: (i) the courts in Belgium following the claim of a member, stakeholder, or prosecutor (see Sub-section 2.4); (ii) the Registry in Greece during the exercise of ad hoc audits and registration (see Sub-section 2.4); and finally (iii) the Regulator in the UK following the requirements regarding the CIC test and ‘default conditions’ (see Sub-section 2.4).

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