MODELO JERARQUICO DE LA MOTIVACIÓN: LA TEORÍA DE LA AUTODETERMINACIÓN

circumstances of the communities that they are seeking to serve, to ensure that development does actually take place. Finally, as organisations consciously account to their stakeholders, the systems in place enable organisations to learn about their strengths and weaknesses and capitalise upon the former while seeking to overcome the latter. In relation to organisational performance as a key feature of accountability, there is an added complication for SEOs compared with charitable and other third-sector

organisations. SEOs are run as businesses, which means that managers need to account for the financial aspects as well as the social aspects and any interrelations between the two. For example, for an organisation that employs homeless persons to conduct its activities, management needs to report on: the financial performance of the organisation and its views on continued sustenance; the social benefits to the homeless persons the organisation is serving; and how the fine balance between the two objectives is maintained.

Like charitable organisations, SEOs have access to various mechanisms with which to discharge social accountability to external stakeholders, including regular reporting practices, performance assessments, participation, self- regulation and social accounting. Focusing on the former, in accordance with the UK reporting requirements of business organisations and NFPOs, all SEOs of a sizeable nature are required to produce annual reports, and some may also choose to discharge their accountability through additional vehicles such as additional documents or their websites. SEOs also have responsibility to ensure their fiduciary accountability, financial accountability and operational accountability. In particular, they need to demonstrate probity, compliance, good governance and control; to highlight the financial position to indicate sustenance; and show impact (ie developments in society). Specific aspects within these categories may differ

between charitable organisations and SEOs, and among SEOs, depending upon the motives and bases of the organisations. For example, an organisation using its activities to generate surplus profits to reinvest in social activities will have a different basis for financial

accountability than one seeking resources to enable it to continue to contribute to social development through its activities.

Initiatives aimed at encouraging accountability in SEOs are broadly absent. This this may in part be explained by the infancy of the sub-sector, and also by the current focus of the government and relevant umbrella organisations on extending the development of the sector, rather than on the way in which it conducts its activities.

B.5 SOCiAL ENTERPRiSE ORGANiSATiONS: ACCOUNTABiLiTy PRACTiCES

Annual reports

A pilot study was undertaken to examine the accountability practices of a small number of SEOs. Twelve SEOs were approached for their annual reports and financial

statements (hereafter referred to as ‘annual reports’) and annual reviews, and their content was analysed in the same manner as those of the charitable organisations described in Chapter 4. In the absence of a comprehensive database of SEOs by defining characteristics, such as size or areas of activity, for the purposes of this study the sample was selected on the basis of the SEOs known to the authors, and details of organisations provided on the SEL and SEC websites.

Six of the 12 organisations contacted provided a copy of their annual reports. Only one provided its annual review (Table B.1) and, consequently, the analysis of reporting practices is based only on the annual reports received. The website of each of the 12 SEOs, the total SEO sample, was also examined.

Of the six respondent SEOs, five operated in a specific area of activity, while one operated on the fringe of the public sector and was a public sector organisation before it became an SEO (Table B.2). The areas of activity ranged from provision of banking and recycling services to helping development in international communities. The sizes of the organisations varied significantly with the largest

generating an annual income of over £2 billion and the smallest, which was reliant principally on grant funding, less than £1 million.

As with charitable organisations, the size of the annual reports varied considerably, with the largest report being more than five times the size of the smallest one (Table B.3). The split of financial and narrative information within the SEO reports was also similar to that of charities, with narrative marginally exceeding the level of financial information provided. Within the narrative section, all charities provided a section on ‘summary of activities’, and five of the six SEOs also had a section on ‘organisational mission’ and a directors’ report. The latter was much more common among SEOs than charities, although this is not surprising given that most SEOs operate as business organisations and a directors’ report is a common feature of such organisations.

As reported in Table B.4 (page 69), in relation to fiduciary accountability, five of the six SEOs examined included a section on governance and decisionmaking in their annual reports, and five also provided an indication of how they analysed the risks that they faced. Only two organisations, however, elaborated on this by specifying the major risks that they faced, and none provided a statement to confirm that their risks had been managed.

Table B.1: Social enterprise organisation response rate

Panel A: Overall response rate Annual reports Annual reviews

Number of requests made 12 12

Number of usable responses 6 1

Response rate (%) 50% 8%

Panel B: Total documents received Number %

Annual report and annual review received 1 8

Annual report only received 5 42

No response 6 50

Total 12 100

Panel C: Annual reports Number %

Hard copy 4a ₃₃

Soft copy 2 17

No response 6 50

Total 12 100

Note

a Of which one also sent its annual review.

Table B.2: Respondent characteristics

Panel A: Principal areas of activitya

Nature of work Area of activity

Operates in a specific area of activity 5 Business and professional 3 Operates on the fringe of the public sector 1 Housing and community affairs 1

Responds to crises – International activities 2

Panel B: Financial characteristicsa

Income (£m) Expenditure (£m) Minimumb _{0.8 0.7} Maximum 2,083 2,030 Mean 453.3 411.7 Standard Deviation 826.5 804.4 Notes

a Details and figures based upon the six SEOs providing copies of their annual reports.

b The smallest SEO was principally grant reliant, while the others generated a significant proportion of their income from trading activities. The smallest SEO generated an annual income of less than £1 million, but the second smallest in the sample generated an income of just over £16 million.

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