Annual reporting by social enterprise organizations: “legitimacy surplus” or reporting deficit?

Abstract

PurposeDrawing on an accountability framework developed for social enterprise organizations (SEOs), this paper examines the annual report disclosure practices of SEOs in the United Kingdom in order to investigate the types of accountability disclosed by SEOs.Design/methodology/approachAfter developing a SEO database, and utilizing a bespoke document coding checklist, the annual reports of 129 SEOs were examined.FindingsThe results indicate that while SEOs would be expected to account in line with normative stakeholder theory, many do not provide constructive and voluntary accountability information to their stakeholders, at least through the annual report, and that their focus is on satisfying legal obligations.Originality/valueIn response to calls for research to better understand accountability in new organizational contexts, this paper makes two contributions: firstly, by extending prior accountability research in the NFP sector to consider organizational hybrids, it raises questions about organizational accountability and how it is discharged in situations where an organization operates as a business and yet is accountable for its social mission; secondly, assuming these organizations are driven by their business and social logics, the findings suggest that SEO accountability disclosure practices are inconsistent with the social objectives on which they are based.

Understanding success in micro‐enterprise development: Dimensions and misconceptions

“…Other researchers go further, emphasizing consequences in terms of outputs-what organisations produce (Connolly & Kelly, 2020;Ossewaarde et al, 2008) and outcomes-effectiveness and empowerment (Atack, 1999;Baur & Schmitz, 2012;Kilby, 2006), consistent with Suchman's (1995) notion of consequential legitimacy. Such dimensions reflect the overall success of an organisation in achieving their intended mission, and are arguably aligned with Suchman's broader notion of cognitive legitimacy based on coherence and justification of rational operations.…”

“…Although developments in the literature highlight the importance of reporting and transparency to enhance the information environment (Burks, 2015; Connolly & Kelly, 2020; Harris & Neely, 2018; Yang & Northcott, 2019), and expressing the values and beliefs underpinning NGOs' work (Hall & O'Dwyer, 2017), comprehensive reporting on outputs, outcomes and impacts is necessary. Yet, while limited forms of reporting continue to be adopted, NGOs' success in alleviating poverty remains unclear, raising concerns regarding NGOs' legitimacy.…”

“…Legitimacy is important for organisations to gain support and secure access to resources (Suchman, 1995), and is itself a resource in organisations (Connolly & Kelly, 2020; Dowling & Pfeffer, 1975; Luke et al., 2013), establishing credibility and assisting in business continuity. Defined as ‘a generalised perception or assumption that the actions of an entity are desirable, proper, or appropriate’, Suchman (1995, p. 574) refers to legitimacy as an ‘umbrella evaluation’.…”

The impact of financial management practices on accountability of Islamic social enterprise (ISE)

“…These accountability mechanisms will determine the current accountability practices of ISEs. In other words, the stakeholder theory views the disclosure, internal controls, planning and budgeting and performance information as ways of realising accountability of the resources and power given to these ISEs (Connolly and Kelly, 2020; Kamaruddin and Auzair, 2019b). In sum, it is expected that financial management practices such as financial disclosure, internal control, financial planning and budgeting and financial performance are critical to enhancing accountability for Malaysian ISEs.…”

“…The literature suggests several financial management practices were identified in affecting ISE accountability. These include financial disclosure, internal control, financial planning and budgeting and financial performance (Connolly and Kelly, 2020; Kamaruddin and Auzair, 2019b). Based on the recent study on financial management in ISE, it is found that financial management, Islamic work ethic and financial governance significantly affect ISE’s accountability (Kamaruddin et al , 2021).…”