does anyone really care how far we're open and transparent in how we do business?

In recent news, there's been a furore of activity over leaked papers about tax havens and money laundering by an international finance firm on behalf of the rich and famous, (allegedly). 

This comes on the back of various campaigns and calls for big business to be more responsible in paying tax and treating employees and people in their supply chain with dignity and respect.

And all of this comes on the back of previous movements around fairtrade, environmental impact, sustainability, and such like.

You would think that all of the media coverage of these themes means that as consumers we've a keen interest in how responsible the businesses we spend our money with are acting, and calling them to ever greater account through demanding that they're more open in how they work.

And yet, anecdotally despite petitions and campaigns, most people I know still shop with the likes of Amazon, buy coffee from Starbucks, and similar... so my question is that while we're outraged when we hear of such unethical corporate behaviour, if it doesn't change our own personal behaviours, actions, and shopping choices, do we really care that much?

Because if we don't, then why should firms strive to be more open and transparent in how they do business?

Many of the businesses I support are social and charitable enterprises, and there's been various encouragements to them over the years to show such openness through reporting on their social impact. And yet researches and surveys show that increasingly, when they do, it's making less of a difference to their customers in influencing their purchasing from them.

For myself - as the only freelance consultant globally (to my knowledge) to openly publish an impact report on myself with openness about my supply chain and other business activities, I know that doing so has never made any difference to my clients and customers final decisions about engaging and commissioning me (I know this, because I ask them!).

So with all the calls for more openness and transparency, I'd like to start another call - this time to start a conversation about what we as consumers really would like those businesses and firms to be open and transparent about, and if they start to, if we'll actually read and act on them...

What Shakespeare can teach us about social enterprise – better ‘to be’ or simply ‘to do’?

Many charities and local authorities are now running services and activities under the banner of ‘social enterprise’ to contribute to their sustainability (both as services and organisations).

This perhaps helps to explain why there’s such confusion about what social enterprise is: some organisations presenting their structure and form as the basis for their identity, while others present their actions as their basis.

But... if it means that communities are benefiting through these ‘branded’ trading activities by groups not structured as social enterprises, then how far should we feel ‘protective’ over our identity? After all, there’s a compelling and logical argument along the lines of “as long as they job’s getting done and supporting people is at the focus of what we do, what does it matter how the organisation is structured...” however, taken to its conclusion this argument surely takes us down the path of the end justifying the means (something the Prince of Demark wrestled with famously in Hamlet).

Muhammad Yunus has waded into this historical debate with his refreshed definition of a ‘social business’ (broadly speaking - that as long as you’re primarily benefitting people in need then you ‘tick the box’). But there’s surely a risk with such loose definitions that many privately owned businesses will start to add to their ‘green-wash’ with ‘social-wash’, and that charities will further muddy the waters by having an ongoing reliance on grants and subsidies while presenting what they do as ‘social enterprise’.

Social enterprise is surely about being a sustainable business that’s rooted in the open marketplace and which exists to principally benefit those in need; it shouldn’t matter who’s in its employ or on its board – these things are fixed and immutable. Otherwise, as officers change, markets, customers, and society become confused by different peoples’ values changing the focus and purpose of what that organisation does and how it does it.

But confusion aside, that social enterprise has challenged and inspired such a growing change in common business practices amongst private businesses and charities is surely an impressive achievement and something we can take pride in?

Marked for success or more confusion?

The principle aim of the Community Interest Company (CIC) was as an easy identifier for social enterprises, but this seems not to have happened in the way people hoped – perhaps because as a legal form CICs offer no features that are inherently unique (i.e. protected asset locks and principle purposes can be entrenched in other legal forms).

But we now have the shiny new Social Enterprise Mark, which will hopefully have a better chance of being the easy identifier as it’s based on recognising defining characteristics of social enterprise in whatever legal form or structured they are enshrined.

BUT... will this Mark spark a new market for ‘marks’? The Soil Association and FairTrade Foundation were both pioneers in certifying organic and fairly traded goods, but other organisations offering organic and fair trade certifications have since emerged...

So perhaps we should be more open to the other ‘marks’ that are available to social enterprises to seek (the Social Firms Star for instance), and welcome others’ attempts to introduce other standards (there’s moves for a worker co-op mark, and Scotland did look at having its own mark as well) and explore how they might best complement each other.

Ultimately though, the Social Enterprise Mark shouldn’t be a holy grail, but one of a number of tools that we should approach and consider its appropriateness to us in the context of our enterprises’ own needs and marketplaces. Some will take the mark and use it to great commercial advantage I’m sure, while for others it simply won’t be relevant...

fair trade tobacco?

a few years ago, I was asked if I knew of anywhere a colleague might be able to procure fair trade tobacco from - and it got me thinking: why not?

1) Fair Trade producers are inevitably organised as marketing or agricultural co-ops, and there's at least one tobacco growers co-op (in Tanzania - scroll down to the bottom of this linked page to find their contact details

)

2) There seem to be lots of 'lifestyle' goods gaining the fair-trade label beyond food - fashion clothing, footballs...

3) An ethical dilemma? Well, to my knowledge the Fair Trade foundation who administers the mark have no stated restrictions as to the types of goods that they can't assure on the basis of ethics

So why not fair trade tobacco?

For the sake of all those smokers who want to be more ethical, let’s help them at least change the impact they have on poverty through the 'lifestyle choices' they've made (just like we do for those people who can't quite kick their love of chocolate or alcohol in the form of wine...)

is social enterprise being forced to become charitable?

In 2006, there was an overhaul to charity legislation, which included extending those things that are deemed to be 'charitable' in law, and so organisations created to pursue them are now legally required to gain charitable status (and all that comes with it with regard to governance, restrictions on trading, etc)...

An example of this is in respect of the charitable purpose of preventing or relieving poverty (surely something that all social enterprises aspire to) and how it can be acheived through Fair Trade; it caught my eye and gives me pause for concern:

"To prevent or relieve poverty by awarding a 'fair trade mark' (and remember that there are now 'social enterprise marks') to products, the sale of which relieves the poverty of producers by ensuring they receive at least a fair price for their goods and advising such producers of the best ways in which to engage in the trading process."

But Fair Trade is about trading not charity - so the lines between charity and enterprise are becomming even more blurred with what some would see as being quite a fundamental social enterprise activity now apparently being charitable in purpose, and so any social enterprise created to purse fair trade (or similarly 'marked') activities now being legally required to adopt chaitable status, even if they felt another form would suit them better...

Are we then now entering an age where as social enterprises we are being forced to change our purposes in order to ensure we can adopt the legal form that best meets our needs and circumstances?
Is the state perhaps becomming too prescriptive in allowing us the market freedoms we need in order to fully realise our potential?

how private business shames social enterprise

Recently I blogged about the debate that's raging in social enterprise land about what the purpose of social enterprise is, and how the various forms that can be adopted serve to confuse the issue unless you see them for what they are - various options to allow you to manifest your vision within a specific set of values that define what social enterprise 'is'.

A recent blog on the Guardian by Jonathan Bland, chief exec of the Social Enterprise Coalition about how social enterprise can show private business how to 'get in right' got me wondering how far this issue of models can be taken - let me give you an example:

if I was to describe to you an established global food business with a multi-million pound turnover; that seeks to source all its products from various sustainable, local, organic and fair-trade suppliers; that specifically seeks to set up new branches in areas of non-affluence (ie where the rich people aren't); that charges customers a price that is affordable to just about everyone; that has created its own charitable trust as well as actively supporting various other charitable causes; that offers all of its employees structured accredited training programmes; that seeks to educate its customers about its various practices and its impacts; and has also just committed to recruiting at least 1/3 of its next years intake of staff from people who have been long-term unemployed, and all without any taking ant form of grant or public subsidy, would that sound like an ideal social enterprise to you?

Sadly its not - its McDonalds, that big international company that all us ethical eco-warrior types fought against in the 80s and 90s, but is now shaming some social enterprises and charitable groups by its ethical practices being of a far greater standard than can be typically found in our sector, and still turning a handsome profit in the process.

And this causes problems for the ethical consumer: McDonalds is not a social enterprise in that it still exists primarily to make as much cash as possible for its investors, but in doing so its realised that it can also create a whole heap of good stuff for people and planet along the way.

Its not a social enterprise as we currently define them and yet its practices shame some of the wider third sector...

I'm lovin it, but I'm not sure that I should...

What's the point of social enterprise?

There seems to be a storm brewing in social enterprise land over exactly what the purpose of social enterprises are - some say they're all about creating a social good, while others think that they're more about challenging accepted ways of working and ushering in a new business model - see
http://thirdsector.co.uk/news/Article/899356/Social-enterprise-now/

Some will look at this debate and perhaps justifyably ask "why can't it be about both?" - after all, if social enterprises prove to be successful businesses, then their model(s?) will be adopted by other businesses (and there are parallels for this in the fairtrade movement - once upon a time Nestle said they'd never do fairtrade as they felt the market wasn't large enough and their customers weren't interested, and yet here they are now with their own fairtrade branded coffee...)

And then there's the question about which model? The 'headlines' of social enterprise may lead you to believe that the Community Interest Company is the only 'true' form for social enterprise, yet some CICs are finding that this form is undermining their ability to trade as they wish to (perhaps the most vocal of which is the social enterprise ambassador Tim Campbell), and many others are still fiunding that regular companies, IPSs, charities, and even PLCs, are sufficient and appropriate after having their rules 'tweaked' to reflect social enterprise values (you know, those things that define them 'cos there's no legal definition of what a social enterprise is...).

So if social enterprise isn't about being a single business model, but an 'enlightened approach', then focussing on promoting "the model" is doomed to failure before it begins as (1) there is no single model; and (2) if social enterprises aren't being encouraged and supported to be the successes that they can be, then there will be no showcase or evidence to argue with the private business world about the strength and validity of the model...

...so - are we now any clearer about what the purpose of social enterprise is, or just as confused as ever now that some of the sectors' leading luminaries are at loggerheads over what its actually all about?

Or perhaps we should leave the philosophical stuff to those fortunate enough to be paid to do such things and get on with changing our bit of the world for the better in the faith that others will catch on by seeing our success...