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Mission-led business review and what it means for social entrepreneurs
Mission-led business review and what it means for social entrepreneurs
Written by
UnLtd employee
UnLtd position
Mission-led business review and what it means for social entrepreneurs
Written by
UnLtd employee
UnLtd position
Last week, the Government announced its plans to rein in bad corporate behaviour - but building a responsible capitalism for the 21st Century also means embracing the current appetite for purposeful business. It means recognising and positively encouraging business models that have social impact at their core. Today’s publication of the Mission-Led Business Review is an important step towards this. The Review was set up by the Government to examine what could be done to encourage mission-led businesses, which it defined as profit-driven businesses that make a powerful commitment to social impact. This includes businesses that have a primary social purpose (the kind of profit-with-purpose business that UnLtd sometimes supports) as well as other businesses that seek to create social impact in the context of their commercial goals. UnLtd submitted evidence to the Review earlier this year, and we are pleased to see that many of our suggestions are reflected in the Review recommendations. They address many of the practical barriers that we know social entrepreneurs face, including access to markets, talent, appropriate finance and specialist advice. They also address cultural barriers. For social entrepreneurship to go mainstream, it is important that society understands that business and social impact can be fully integrated. More broadly, we endorse the Review’s vision of the public, private and social sectors working together to address societal issues, and believe that social entrepreneurs have an essential role to play in these efforts. Two of the recommendations are particularly important for social entrepreneurs who choose to set up their social venture as a company limited by shares. Social entrepreneurs develop a range of innovative business models, using various legal structures. Whichever they choose, it is important that the legal structures can be made to work effectively for their social ventures. In our submission, we said that it should become normal and easy for limited companies to make a legal commitment to a social purpose. This is fundamental as it redefines what success means for the business, and creates duties for Directors to act in line with this. Although existing company law allows a business to specify a social purpose, this is largely unknown and there’s a real need to raise awareness. The Review makes two recommendations on this:
We very much welcome these recommendations, and are pleased to announce that UnLtd and the law firm Bates Wells Braithwaite are now working with the Government Inclusive Economy Unit on a project that responds directly – an online tool that will make it easy for social entrepreneurs and mission-led businesses to declare and commit to a purpose beyond profit. We will be collaborating with various partners including Companies House to co-design this, and invite other partners to join us. Please contact [email protected] for more information.