3.1.1.3 The necessity for empirical research in the governance of social enterprises

Mason et al. point out the need for more empirical research concerning the governance of social enterprises.1 Campi et al. while looking at the functioning of stakeholders in the governance of Belgian WISEs, examine the importance of stakeholders as members of the organisation thereby taking into consideration the legislation regarding stakeholder participation and the influence of stakeholders within the decision-making formal processes.2 In the Campi et al. study, it is also emphasised that deeper analysis is needed of the real influence of stakeholders in decision-making processes, especially regarding informal processes such as informal coalition building and the access to information.3

Campi et al. also conclude that the legal status constitutes a weak indicator of whether a WISE has a single or multi-stakeholder nature.4 They state that the choice of a multi-stakeholder status:

We note that this conclusion may however vary depending on the specific rules provided in the tailor-made legislation for social enterprises in the various countries. For example, in the UK, the CIC Regulations of 2005 encourage the involvement of more than one category of stakeholders in the decision-making processes of the CIC. The CIC Regulations of 2005 consider stakeholders to be all the ‘persons affected by the company’s activities’6 a definition which entails the involvement of various types of stakeholders.

In the following sections, we examine by means of the case study method how the Belgian VSO legal provisions are implemented in practice. We assess how specific provisions stimulate cooperatives with a social purpose in different sectors to include, primarily, employees, and subsequently, other stakeholders in the decision-making processes. The legal form of the cooperative was chosen because it is the dominant legal form adopted by Belgian VSO social enterprises. Subsequently, we provide a cross-sectoral explanation of the involvement of employees and other stakeholders in the decision-making processes of three Belgian cooperatives with a social purpose in different sectors. We compare the incentives for employees to acquire membership rights, which provide formal access to decision-making processes as it is prescribed by law, with the incentives for other categories of stakeholders, which can only participate indirectly in decision-making processes using informal processes and means of communication. If we take into consideration the Campi et al. conclusion, that the legal provisions applicable to VSOs permit but do not require the participation of employees in the decision-making processes, we can hypothesise that the concept of employee participation will differ in the various VSO social enterprises in the different sectors, depending on the autonomous decisions of their founders.7 Furthermore, by examining the Belgian VSO legislation which contains only enabling provisions for the participation of one category of stakeholders in the decision-making processes of the governing bodies, i.e. only for employees, we hypothesise that other types of stakeholders are less incentivised to participate in the decision-making processes of the social enterprises. By comparing the incentives for employees with the incentives for other categories of stakeholders, we also aim to contribute to the discussion on whether the VSO legislation should be revised and improved.

Furthermore, the empirical examination of the practical implementation of the Belgian tailor-made legislation by social enterprises will enrich the theoretical framework of governance for these types of social enterprises. The discussion will ultimately lead to conclusions that will improve the understanding of social enterprises’ organisational function and corporate activity.8

The following Sub-section elaborates on the existing tailor-made legislation for VSO social enterprises in Belgium, which allows the participation of employees in governance and in decision-making processes. The position of other types of stakeholders in the VSO decision-making processes will be also discussed later in this article. The sections that follow contain our findings derived from the empirical examination of the implementation of the Belgian legislation on the issue of participation and influence of employees and other types of stakeholders in the governance of these social enterprises.