The governance of social enterprises has become an increasingly important topic in third-sector research. Due to the growing marketization and professionalism of the social sector (Hwang and Powell, 2009) in many countries, tensions in governance appear between the legal heritage of NPOs and their new business practices. This sector experiences a growing shift toward the hiring of professional managers, and the adoption of business-like formalized “best” practices. The aim of this article is to understand how different social enterprises embedded in the same institutional field can then develop and use strategically different governance arrangements.
In this article, we build on Cornforth’s (2004) definition of governance in the third sector as the systems and processes concerned with ensuring the overall direction, control and accountability of an organization. Governing defines the organization's mission and goals and outlines simultaneously the best possible actions to achieve organisational survival and growth within an evolving and demanding society. So, governance is not only about the role and composition of social enterprises’ board, it also encompasses the impact of other actors (founders, boards and managers), who contribute to the governance arrangements.
We undertook a longitudinal case study (2005-2017) with a chronological perspective. We collected data from the two organisations and conducted interviews with key actors (founders, board members, managers). Our results show that even evolving within the same field, with comparable objectives, SE develop and use strategically very different governance arrangements. Both cases reveal the central position of the SEs’ founders. Their different professional trajectories and their different backgrounds and networks have deeply influenced the earliest governance arrangements. In one case, the business governance model was adopted; in the other case, the philanthropic governance model dominated. These two models somehow converged in the way boards were formalised facing organisational growth needs. However, decision-making processes are actually reflecting complex governance structures with different boards operating at different levels and all influenced strategically by the founders. Moreover, the appointment of professional managers did not transform the governance arrangements which still reflect the central positioning of the two founders in their SE.
