Is it time for the Social Enterprise Mark Company to become a mutual?

In light of the attempt to transfer the assets of Rise to the ailing Social Enterprise Mark Company (Semco), Rory Ridley-Duff asks: is it time for Social Enterprise Mark (SEM) award holders and infrastructure bodies to take ownership of the SEM brand and reshape it for use by the whole social enterprise movement?

Recently, I wrote an academic paper (co-authored with Cliff Southcombe) about the Social Enterprise Mark.  This generated debate not only among practitioners on the Guardian website, but also social enterprise educators and researchers at the International Social Innovation Research Conference in London.

That paper, in revised form, has now won a ‘best paper’ award at the 34^th Institute for Small Business and Entrepreneurship conference, and is contributing to an international review of social enterprise concepts in four continents by Social Enterprise Europe.  Recognising the connection between social enterprise and co?operative concepts (democracy, equality, solidarity, mutuality and reciprocity) is now firmly on the agenda of (social) enterprise educators and practitioners worldwide.  In this article, I make the case for their inclusion in the SEM.

In our paper, Cliff and I make explicit the origins of social enterprise at Beechwood College (from 1978 onwards) where social auditing was developed with worker and community co-operatives. The Social Enterprise Mark remains divisive because it questions the legitimacy of enterprises in which the concept of ‘social enterprise’ was developed.

The founders of the Social Enterprise Partnership (1997) were unambiguous in their support for producer co-operatives and employee-ownership.  The same was true at Social Enterprise London (1998) where the initial subscribers included four worker co-operatives, four co?operative development agencies and the Co-operative Party.  It is also true of the fairtrade movement, where 75% of goods are created by producer co?operatives, and there is an explicit goal to improve the lives of producers and the communities in which they live.

Semco’s breathtaking misreading of the social enterprise movement is linked to a crude attempt to redefine social enterprise so it fits with US-style social entrepreneurship and venture philanthropy.

There is, however, an alternative trajectory based on Europe’s social economy and fair trade concept based on commitments to share enterprise ownership and governance with producers, customers and service users, and empower them to invest and distribute wealth in ways that improve the wellbeing of their communities. Reclaiming this vision would enable the wider movement to embrace all types of co-operatives and mutuals and fully engage in their supply chains.

With 450 SEM holders, there is now a critical mass of organisations and supporters that can take control of the brand and make it more relevant to the movement. In suggesting this, the charitable turn taken in the SEM criteria (detailed carefully by Cliff and I in our paper), represents an obstacle to the advancement of social democracy in enterprise development. The words of educator Paulo Friere serve as a caution against uncritically accepting a charitable mindset:

‘They talk about the people, but do not trust them, and trusting the people is the indispensable pre?condition for revolutionary change. A real humanist can be identified more by his trust in the people, which engages him in their struggle, than by a thousand actions in their favor without that trust.’

In social enterprise terms, this means sharing membership of companies and co-operative societies not only with members of the workforce (both collectively and individually), but also with customers and service users. It means giving each key stakeholder an equal opportunity to shape the future direction of the enterprise, and support for them to review and report enterprise performance to other stakeholders. Anything less reproduces class divisions and self?selecting elites who think a ‘thousand actions’ will alleviate (others) disadvantage while perpetuating a privileged social position.

So why not make the most important of the SEM criteria evidencing that an enterprise embraces workers, investors, customers and/or service users as equal partners in enterprise development? And why not start this work at Semco itself?

Credible evidence can take many forms: extending membership and voting rights to key stakeholders; facilitating their participation in strategic decision-making; evidencing the manner in which wealth is distributed to each of them. If Semco can embrace this vision, it will become the vanguard of a European social economy that secures social justice and economic democracy. If it does not, it will be the ball that chains social enterprise in the UK to a US-style non-profit sector.

• Rory’s his award winning paper, co-authored with Cliff Southcombe, is available as part of the ISBE conference proceedings and will shortly be downloadable from http://shura.shu.ac.uk/4052/.