Key Features of Internal Governance Mechanisms for Social Enterprise Sector

Abstract

Malaysian government is prioritising the efforts in raising the income and uplifting the wellbeing of the citizen (rakyat) in order to achieves an equitable society by the year 2020. Currently, Malaysian government is striving to boost the bottom‐class society (i.e. bottom 40 percent household income group (B40)) to the middle‐class society (i.e. middle 40 percent household income group) by fostering community and social‐based enterprises amongst the community. More job opportunities, appropriate infrastructures and facilities may be created by setting up social enterprises, and subsequently encourage local community involvement in various social activities. This will result in a better quality of life for the B40 communities which will accommodate the efforts to resolve social or environmental problems and help particular population to earn extra income. However, a proper governance system and legal structure under which social enterprises can register and operate are currently not in place. Hence, the overall aim of this study is to obtain a clear picture of the existing governance structure adopted and practiced by various forms of social enterprises in Malaysia. In order to achieve this objective, a qualitative method has been employed and involved qualitative data collection via series of semi‐structured face‐to‐face interviews with the top level manager from the selected organisations. The qualitative data in this study is in the form of words (from the transcriptions of the interviews conducted) whereby ATLAS.ti is a qualitative data analysis programme that has been used to analyse the interviews. Generally, a social enterprise subsidiary to holding companies is subjected to a proper governance structure set up by the holding itself. Its structure is similar to those of corporate entities but with some additions to the existing governance system in adopting it to local business environment.