Posted by: bevmeldrum | September 15, 2008

Listening to … Rory Ridley-Duff

My name is Rory Ridley-Duff.  I will be presenting a section of the ‘Social Entrepreneurial Mindset’ theme of the seminar day and wanted to contribute to a debate about the respective roles of employee-owned organisations, co-operatives, charities and voluntary groups to the social enterprise movement.

There is considerable irony (for me personally) that the employee-ownership sector, despite active involvement in the formation of both Social Enterprise London and the Social Enterprise Coalition (SEC), has been marginalised in social enterprise policy. The recent
All Party Parliamentary Report on Employee Ownership” makes this clear in repeated pleas for political recognition “comparable” to the social enterprise sector (as if it has somehow left the movement).  I was surprised, therefore, that after the event the Chair of the Employee Ownership Association (EOA), Patrick Burns, felt that most members of their association did not feel part of the movement (despite the EOA itself being a member of the SEC).

Anyone who has participated in, or provided business support to, employee-owned / co-operative organisations cannot fail to experience and recognise the ‘social’ element of their enterprise orientation.  As Rob Paton and Roger Spear documented in the late 1980s (Reluctant Entrepreneurs, from the OU), the transition to worker ownership represents an enormous learning curve for trade unions, workers, managers, suppliers, customers (and in some cases receivers) as social relations are restructured to support workplace democracy and stronger links to the local community.

There are two constructive roles that such organisations can play.  In Spain, for example, the ‘for-profit’ co-operatives that produce industrial and consumer goods provide most of the financial capital for the secondary co-operatives offering education, housing and welfare benefits.  Secondly, viable models of workplace democracy are vital as learning grounds for inclusive management and decision-making processes.

At Mondragon, one of the most successful co-operatives in Spain – if not in the entire world – they run regular and accessible seminars (at low cost) for people wishing to learn about their approach.  If we are to apply ‘business’ practices to social enterprise, why not draw those practices from businesses that promote democracy?

My biggest concern is that marginalising the members of the EAO will leave social enterprises over dependant on state funds and philanthropy. Both these funders tend to impose top-down board-driven governance models rather than democratic self-management.  As Alibeth Sommers argued at the Social Entrepreneurship Research Conference in 2007, existing government policy toward social enterprise is about the expansion, not the contraction, of state influence.  As I further argued in Corporate Governance (2007), policy for the CIC was skewed in favour of the interests of charitable trusts and the government, not the promotion of democratic forms of ownership and control.

What are your thoughts on the way the social enterprise movement, charities and non-profit social enterprises, should develop links with profit-making employee-owned businesses and co-operatives?

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Responses

  1. Personally, as a cooperative member, I think the Social Enterprise Movement should stop trying to supplant the cooperative movement and start trying to get their cooperative siblings seats at the tables they find themselves at. As I understand it, South-West England is one of the few areas where the regional cooperative body (Cooperatives-SW) and social enterprise body (RISE-SW) have board-level links, but even there, RISE-SW often uses deviant definitions of social enterprise that exclude profit-making cooperatives and seems to sulk when that practice is challenged.

  2. Semi-related to your comments about CIC regulation being skewed towards the government: do you think it is possible for any CICs to be cooperatives if the regulator ever actually uses their power to overrule CIC members?

  3. I am part of a co-operative, one that is profit-making (on a good day) but that is also driven by its social goals – to develop software and resources for social entrepreneurs and other ‘for more than profit’ entrepreneurs.

    I think we have the best of both worlds – we get to be very much a profit-making co-operative and a social enterprise. On a good day we can also be called an ethical business and a Third Sector organisation.

    I know we all like to identify with something but sometimes I just wonder whether it just isn’t get a little bit silly.

    We are about using the ‘business’ model to achieve ‘social’ goals. Maybe Rob Greenland of Social Business Consulting is right talking more about social business than anything else.

  4. Hi all,

    Thanks for the comments. Starting with MJ Ray. There is a debate about CICs / Cooperatives. Certainly the powers of the regulator are the biggest giveaway that the government intends to use CICs for its own purposes. I was dismayed that these provisions were included while stakeholder democracy was not.

    I’m against the power that the regulator has, mainly because it can be exercised without court approval and against the wishes of company members. Given that CICs are not required to be democratic (in the co-operative sense), there is an argument that these powers are necessary. Were the regulator to intervene into a co-operative or CIC operating on the principle of one member one vote, it would be an abuse of power and the subversion of democracy. My view is that there should be recourse to mediation, an appeals process, or court, should the regulator seek to use these powers.

    RISE’s Social Enterprise Mark criteria has sparked a debate and I am engaged with them at the moment over the perceived bias toward charities and voluntary groups.

    As for Bev, identity matters on many levels (personal, organisational, community etc.). I am for tolerance and inclusivity – I would not wish to marginalise charities/voluntary groups entering the debate any more than the co-operators that founded many of the support organisations. There is room for both approaches – charities can enfrancise people more effectively in specialist problem areas. The question is who they then work with to continue the ‘social’ project. If we simply return them to the system that created social exclusion in the first place, we’re just reproducing the problem. It is, perhaps, better to understand both approaches to tackling social exclusion (prevention as well as cure). This will be more effective than prioritising only the cure (and not address the systemic problems), or only prevention (which leaves those disadvantaged without ways to recover their lives).

    All the best
    Rory


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