Expert Delivers Social Business Australia Inaugural Lecture
24 March 2010 at 3:54 pm
British expert, Dame Pauline Green has urged the Rudd Government to ensure that the newly emerging social business sector has a level playing field with other corporate structures; as part of her inaugural Social Business Australia lecture.
Dame Pauline is the President of the International Co-operative Alliance based in the UK and a former member of the European Parliament representing North London. She presented the inaugural SBA lecture at Parliament House in Canberra following the launch of SBA in 2009.
Dame Pauline described social businesses as a growing phenomenon across the globe bringing under one umbrella all those business forms where trade or activities are undertaken for social purpose, and where profits or surpluses are used for social benefits.
Dame Pauline emphasized that social businesses are businesses with each one of them able to make profits, or surpluses. But she says it is what these social businesses do with those profits, that makes them so very different.
Social businesses are based in their local community, are often owned and controlled by their communities. They keep local services in the hands of local people, for local people. Unlike investor owned businesses, the first priority of a social business is not to maximise profit to ensure an ever increasing payout to shareholders.
Rather a social business has multiple bottom lines and their surpluses are used:
- To reinvest in the business to ensure that it is meeting the investment needs of the business, understanding that without a successful business, we cannot meet any social objectives;
- Some, like cooperatives, make an economic return to their owner members thereby supporting the local communities in which those social businesses are based, keeping wealth local, and helping to grow local economies;
- Most if not all, invest directly in the local communities themselves, supporting the young, the vulnerable and hard to reach parts of society, but also trying to stimulate the growth of the social business economy within its trading reach.
Dame Pauline says the social business sector needs a level playing field and it is critical that government and indeed all serious political parties who aspire to government, understand the difference between investor led businesses and social businesses.
She says all the evidence from Europe and to some extent from the US is that the renaissance of the cooperative model of the last 10 to 15 years, coupled with the development of new social business forms has led to some large corporations trying to steal their social business identity.
Suddenly the language of engagement with, and participation of the customer base, has been reinvented by large corporations as a strong marketing tool, a powerful message that plays well with politicians and ticks many of the boxes of the annual corporate social responsibility report.
But she says being a social business is not about marketing or CSR, it is an alternative business model that is built on the concept of member ownership, member participation and engagement.
As well she says the government needs to ensure that it has in place an enabling legislative environment that will allow the sector to grow and expand without regulatory or legislative obstruction.
The full speech can be downloaded at: http://www.socialbusiness.coop/