3.2.1.2 Participatory governance as a legal concept: the conceptual framework

Because the concept of social enterprises is very recent and in view of its hybrid structure, the concept is still nascent in legal theory; this explains the lack of universally accepted rules and provisions for social enterprises.1 The development of new legal forms for social enterprises in various jurisdictions and legal systems, which are designed per se to better fit the needs of these enterprises and resolve some of their major challenges as hybrid organisations, shows the importance of closely examining participatory governance in the context of these new legal formats.2 Therefore, the conceptualisation of participatory governance in that context will contribute to the process of improving and formulating better and innovative legal constructs while also offering researchers and entrepreneurs alternative insights into governance and participation.

In a series of studies, the current authors have elaborated on the meaning of the legal concept of governance of social enterprise in the context of tailor-made legislation for social enterprises in various countries.3 It is well-noted in the literature on international social enterprises4 that legislation has an arbitrary role in determining the function and the governance dynamics of social enterprises – for instance, because of the variety of legal forms for social enterprises prescribed in adjustable Articles of Association (hereafter ‘AoA’) and adapted in different or mixed legal and organisational structures. However, social enterprises would always be incorporated legal entities operated and organised to a certain extent in a way that does not go beyond stipulated legal rules, rights and responsibilities. From this rational perspective, we note that the participatory governance of social enterprises is apparently featured in the role and rights of various types of stakeholders in decision-making processes, differently prescribed in various legal frameworks.5 These decision-making processes reveal a role for various categories of stakeholders in the governance of social enterprises as well as their level of involvement on the basis of legal rights, i.e. ownership rights, voting rights, consultation rights and rights to information. They are conferred to them and as such allow them to participate in the decision-making processes of the governing bodies to a certain extent.6 This conceptual approach aligns very well with what Spitzeck and Hansen conceptualised as stakeholder governance on the basis of power and scope.7 In their model, ‘power refers to the level of influence stakeholders are granted in corporate decision making’, which also entails the level of involvement on the basis of legal rights and rules; the term ‘scope’ refers to the ‘breadth of power in corporate decision making’, which entails the roles and the competences of stakeholders in decision-making.8 Spitzeck and Hansen’s empirical investigation of the conceptual model led to the clustering of identified stakeholder mechanisms on the basis of patterns regarding the governance structures and the level of involvement of stakeholders in corporate governance.9

From the aforementioned perspective, we aim to conduct an in-depth examination of the concept of participatory governance in the context of the Greek tailor- made legal framework for social enterprises. In particular, we aim to conduct an in-depth examination of the concept of participatory governance in the context of two Greek social enterprises which use in their legal structure the legal variations of the Greek tailor-made legal form for social enterprises, the Social Cooperative Enterprise (here abbreviated as Koinsep). The case studies concern a Koinsep of Care and a Koinsep of Collective and Productive Purpose. With these two case studies, we aim to explore and illustrate how the relationships and responsibilities between various stakeholders and the social enterprises are shaped, particularly in these two Greek social enterprises, and how they are in compliance with the Greek legal framework for social entrepreneurship.