Saturday, 29 October 2011

Defining 'social enterprise' - the next pointless challenge for our lawmakers!


Our masters, having set about trying to define "sustainable development" and now being urged - by Hazel Blears no less - to set out a legal definition of that tricksy term, "social enterprise":

Former Communities Secretary Hazel Blears MP has called for a legal definition for social enterprises, while minister for civil society Nick Hurd has conceded that such a definition may be required. 

Hazel Blears went on to refer to the "social enterprise sector" - showing just how much momentum there is behind this need for definition.

It seems that Hazel is concerned that wicked and evil capitalists will sneak in by calling themselves "social enterprises" thereby tarnishing the principle that the tern enshrines (or something like that).

I stick firmly to the view that all businesses - indeed every enterprise whether constituted or not - has to be 'social'. What should concern us isn't to try and separate the enterprise sheep from the enterprise goats through some form of legal definition but to focus instead on ethics - on whether the enterprise behaves ethically.

And the core elements of ethical business have nothing to do with the chunterings of "fair trade" - these are essentially political considerations - but concern the way in which the business operates. Does it comply with the law? How well does it treat those who work for it? Does it 'exploit' - through deception or dissembling - its customers, shareholders or investors (and this group would include donors)?

Such matters relate to the moral standing of the business - its managers, its directors and its owners - rather than to the precise legal structure adopted. It is nonsense to suggest that defining an operation as a "social enterprise" suddenly waves a magical wand over its affairs thereby making it a paragon of ethical virtues.

There are some enterprises where the operation of the business delivers a wider social purpose - Remploy, Jamie Oliver's, Fifteen restaurants and Bradford Councils-owned, ISG are examples - but whether these are established as for-profit businesses owned by shareholders, charities or some other legal structure is of no consequence.

The point and purpose of Hazel Blears call is to allow government to create a set of favoured organisations - "social enterprises" - that can be granted preference in bidding for contracts within, for example, the NHS.


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