3.4.0

This study aims to examine whether participatory governance of stakeholders is realised in the UK tailor-made legal form for social enterprises, i.e. the Community Interest Company (CIC) through stakeholder consultation and engagement mechanisms. As such, two in-depth case studies of two variations of the CIC legal structure, i.e. CIC limited by guarantee and CIC limited by shares have been developed. This study provides evidence of the governance challenges experienced by two social enterprises in Scotland. It shows that although the ‘light touch’ character of the regulatory framework encourages rather than obliges stakeholder participation in the corporate governance of the CIC, complexities and trade-offs at all the levels of decision-making hamper participatory governance to be practically substantiated. The development of stakeholder mechanisms as consultation processes in the operations of the CIC does not entail the participation of stakeholders in the decision-making activities. The study aims to explain: (i) the legal and regulatory environment relating to the CIC legal structure of social enterprises in the UK/Scotland; and (ii) the impact of the regulatory environment on the organisational structure of two social enterprises. The study focuses in particular on the subject of stakeholder involvement and participatory governance in social enterprises that have adopted the CIC legal form. This study identifies the practical implications and complexities of implementing the special legislation on participatory governance of social enterprises, and promotes their comprehensive understanding by exploring various ways in which social entrepreneurs deal with these complexities in every-day life.

Participatory Governance, UK, Social Enterprises, Stakeholders, Community Interest Company, CIC Regulator