Social Business, Accountability, and Social Impact

Abstract

The social business concept is receiving increased attention as social businesses could solve some of the social problems that we currently encounter in society, for example, hunger, poverty, unemployment, etc. Social businesses pursue a social mission through self-financed business models, rather than relying on philanthropy to survive. They should be accountable for both financial and social performance (activities) to multiple stakeholders who have different demands and interests. We explore how social businesses should discharge their accountability in terms of financial accountability, accountability for their social impacts, and their social and environmental accountability. Since there is no common accountability framework for the measurement and disclosure of social impact, this research aims to construct and suggest an accountability framework for social businesses. To achieve this aim, we systematically review the literature on accountability, blended value and social business, and develop a framework for the accountability of social business. Our findings suggest that accountability for social business is underpinned by the blended value creation perspective. Social businesses require an extended form of accountability framework, including accountability for legal accounting obligations, accountability for performance, and accountability for programs. Social businesses should also discharge their accountability through reporting, dialogue, engagement, and actions. Through this extended accountability, social businesses become more transparent and accountable.