This paper draws upon accountability and legitimacy theories to explore for what social enterprises are accountable, how they communicate accountability, and to what extent they publicly communicate accountability. Case study methodology was employed, examining four work-integrated social enterprises in Australia. Data collection involved interviews with managers of each social enterprise, and a review of various secondary data including social enterprise websites and internal and external reports. Findings reveal a temporal dimension of accountability, as social enterprises acknowledged their dual social and financial accountability, but prioritised financial over social performance. Communication of social performance was limited, with publicly available reports partial and selective in nature. Communication of financial performance was even more limited, reporting typically directed to internal stakeholders. Implications include the need for social enterprises to communicate social and financial performance more broadly, in order to advance their legitimacy from moral (based on intentions) to consequential (based on achievements).
This is a preview of subscription content, access via your institution.
Buy single article
Instant access to the full article PDF.
Price excludes VAT (USA)
Tax calculation will be finalised during checkout.
A non-profit organisation promoting and supporting social enterprise in Australia.
In its capacity as a funding source.
Alter, S. K. (2006). Social enterprise models and their mission and money relationships. In A. Nicholls (Ed.), Social entrepreneurship: New models of sustainable social change (pp. 205–232). Oxford: Oxford University Press.
Austin, J., Stevenson, H., & Wei-Skillern, J. (2006). Social and commercial entrepreneurship: Same, different, or both? Entrepreneurship Theory and Practice,30(1), 1–22.
Australian Accounting Standards Board. (2015). Exposure draft ED270 reporting service performance information. http://www.aasb.gov.au/admin/file/content105/c9/ACCED270_08-15.pdf.
Barraket, J., Collyer, N., O’Connor, M., & Anderson, H. (2010). Finding Australia’s Social Enterprise Sector (FASES). Brisbane: Australian Centre for Philanthropy and Nonprofit Studies, Queensland University of Technology and Social Traders.
Barraket, J., Mason, C., & Blain, B. (2016). Finding Australia’s Social Enterprise Sector (FASES) 2016. Social Traders and Centre for Social Impact, Swinburne University of Technology.
Barraket, J., Qian, J., & Riseley, E. (2019). Social enterprise: A people-centred approach to employment. https://www.csi.edu.au/media/WestpacFoundation_CSI_report_Aug2019.pdf.
Battilana, J., & Lee, M. (2014). Advancing research on hybrid organizing: Insights from the study of social enterprises. The Academy of Management Annals,8(1), 397–441.
Battilana, J., Sengul, M., Pache, A., & Model, J. (2015). Harnessing productive tensions in hybrid organizations: The case of work integration social enterprises. Academy of Management Journal,58(6), 1658–1685.
Benjamin, L. M. (2008). Account space: How accountability requirements shape nonprofit practice. Nonprofit and Voluntary Sector Quarterly,37(2), 201–223.
Bissola, R., & Imperatori, B. (2012). Sustaining the stakeholder engagement in the social enterprise: The human resource architecture. In J. Kickul & S. Bacq (Eds.), Patterns in social entrepreneurship research (pp. 137–160). Cheltenham: Edward Elgar Publishing Limited.
Bovens, M. (2007). Analysing and assessing accountability: A conceptual framework. European Law Journal,13(4), 447–468.
Bovens, M. (2010). Two concepts of accountability: Accountability as a virtue and as a mechanism. West European Politics,33(5), 946–967.
Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in Psychology,3(2), 77–101.
Carman, J. G. (2010). The accountability movement: What’s wrong with this theory of change? Nonprofit and Voluntary Sector Quarterly,39(2), 256–274.
Christensen, R. A., & Ebrahim, A. (2006). How does accountability affect mission? The case of a nonprofit serving immigrants and refugees. Nonprofit Management and Leadership,17(2), 195–209.
Connolly, C., & Kelly, M. (2011). Understanding accountability in social enterprise organisations: A framework. Social Enterprise Journal,7(3), 224–237.
Cordery, C., & Sinclair, R. (2013). Measuring performance in the third sector. Qualitative Research in Accounting and Management,10(3/4), 196–212.
Cornforth, C. (2014). Understanding and combating mission drift in social enterprises”. Social Enterprise Journal,10(1), 3–20.
Dhanani, A., & Connolly, C. (2012). Discharging not-for-profit accountability: UK charities and public discourse. Accounting, Auditing & Accountability Journal,25(7), 1140–1169.
Doherty, B., Haugh, H., & Lyon, F. (2014). Social enterprises as hybrid organizations: A review and research agenda. International Journal of Management Reviews,16(4), 417–436.
Ebrahim, A. (2003a). Accountability in practice: Mechanisms for NGOs. World Development,31(5), 813–829.
Ebrahim, A. (2003b). Making sense of accountability: Conceptual perspectives for northern and southern nonprofits. Nonprofit Management & Leadership,14(2), 191–212.
Ebrahim, A. (2005). Accountability myopia: Losing sight of organizational learning. Nonprofit and Voluntary Sector Quarterly,34(1), 56–87.
Ebrahim, A. (2010). The many faces of nonprofit accountability. In D. O. Renz (Ed.), The Jossey-Bass handbook of nonprofit leadership and management (pp. 101–123). San Francisco, CA: Jossey-Bass.
Ebrahim, A., Battilana, J., & Mair, J. (2014). The governance of social enterprises: Mission drift and accountability challenges in hybrid organizations. Research in Organizational Behavior,34(1), 81–100.
Ebrahim, A., & Rangan, V. K. (2010). The limits of nonprofit impact: A contingency framework for measuring social performance. Harvard Business School working paper 10-099, Harvard Business School.
Fereday, J., & Muir-Cochrane, E. (2008). Demonstrating rigor using thematic analysis: A hybrid approach of inductive and deductive coding and theme development. International Journal of Qualitative Methods,5(1), 80–92.
Grant, R. W., & Keohane, R. O. (2005). Accountability and abuses of power in world politics. American Political Science Review,99(1), 29–43.
Gray, R., Bebbington, J., & Collison, D. (2006). NGOs, civil society and accountability: Making the people accountable to capital. Accounting, Auditing & Accountability Journal,19(3), 319–348.
International Public Sector Accounting Standards Board. (2015). Recommended practice guideline 3 reporting service performance information. http://www.ifac.org/system/files/publications/files/IPSASB-RPG-3-Reporting-Service-Performance-Information.pdf.
Jacobs, A. (2006). Helping people is difficult: Growth and performance in social enterprises working for international relief and development. In A. Nicholls (Ed.), Social entrepreneurship: New paradigms of sustainable social change (pp. 247–270). Oxford: Oxford University Press.
Kerlin, J. (2006). Social enterprise in the United States and Europe: Understanding and learning from the differences. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations,17(3), 246–262.
Kerlin, J. A. (2010). A comparative analysis of the global emergence of social enterprise. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations,21(2), 162–179.
Lall, S. A. (2017). Measuring to improve versus measuring to prove: Understanding the adoption of social performance measurement practices in nascent social enterprises. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations,28(6), 2633–2657.
Lall, S. A. (2019). From legitimacy to learning: How impact measurement perceptions and practices evolve in social enterprise—Social finance organization relationships. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations,30(3), 562–577.
Lapadat, J. C. (2010). Thematic analysis. Encyclopedia of case study research. Thousand Oaks, CA: Sage Publications.
Lee, M., & Battilana, J. (2013). How the zebra got its stripes: Imprinting of individuals and hybrid social ventures. Harvard Business School Organizational Behavior Unit Working Paper 14-005.
Lindblom, C. K. (1994). The implications of organizational legitimacy for corporate social performance and disclosure. Paper presented at the critical perspectives on accounting conference, New York.
Luke, B. (2016). Measuring and reporting on social performance: From numbers and narratives to a useful reporting framework for social enterprise. Social and Environmental Accountability Journal,36(2), 103–123.
Luke, B., Barraket, J., & Eversole, R. (2013). Measurement as legitimacy versus legitimacy of measures—Performance evaluation of social enterprise. Qualitative Research in Accounting & Management,10(3/4), 234–258.
Lyon, F., & Sepulveda, L. (2009). Mapping social enterprises: Past approaches, challenges and future directions. Social Enterprise Journal,5(1), 83–94.
Mashaw, J. L. (2006). Accountability and institutional design: Some thoughts on the grammar of governance. In M. Dowdle (Ed.), Public law working papers: Public accountability—Designs, dilemmas and experiences (p. 115). Cambridge: Cambridge University Press.
Messner, M. (2009). The limits of accountability. Accounting, Organizations and Society,34(8), 918–938.
Nederhof, A. J. (1985). Methods of coping with social desirability bias: A review. European Journal of Social Psychology,15(3), 263–280.
Nicholls, A. (2009). ‘We do good things, don’t we?’ Blended value accounting in social entrepreneurship. Accounting, Organizations and Society,34(6/7), 755–769.
Nicholls, A. (2010). The legitimacy of social entrepreneurship: Reflexive isomorphism in a pre-paradigmatic field. Entrepreneurship Theory and Practice,34(4), 611–633.
O’Dwyer, B., & Unerman, J. (2007). From functional to social accountability: Transforming the accountability relationship between funders and non-governmental development organisations. Accounting, Auditing & Accountability Journal,20(3), 446–471.
Pache, A., & Santos, F. (2013). Inside the hybrid organization: Selective coupling as a response to conflicting institutional logics. Academy of Management Journal,56(4), 972–1001.
Preston, A. M., Wright, C., & Young, J. J. (1996). Imag[in]ing annual reports. Accounting, Organizations and Society,21(1), 113–137.
Productivity Commission. (2010). Contribution of the not-for-profit sector research report. Canberra: Australian Government.
Ryan, C., Dunstan, K., & Brown, J. (2002). The value of public sector annual reports and annual reporting awards in organizational legitimacy. Accounting, Accountability, & Performance,8(1), 61–76.
Spear, R. (2016). National profiles of work integration social enterprises: Unite Kingdom, EMES European Research Network. https://www.socialtraders.com.au/wp-content/uploads/2016/05/National-Profiles-of-Work-Integration-Social-Enterprises-United-Kingdom-The-ELEXIES-Project.pdf.
Stone, M. M., & Ostrower, F. (2007). Acting in the public interest? Another look at research on nonprofit governance. Nonprofit and Voluntary Sector Quarterly,36(3), 416–438.
Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Review,20(3), 571–610.
Unerman, J., & O’Dwyer, B. (2006). Theorising accountability for NGO advocacy. Accounting, Auditing & Accountability Journal,19(3), 349–376.
This research was approved by the Queensland University of Technology University Human Research Ethics Committee, Approval No. 1400000802.
There was no funding received for this research.
Conflict of interest
The authors confirm there are no conflicts of interest.
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
About this article
Cite this article
Bradford, A., Luke, B. & Furneaux, C. Exploring Accountability in Social Enterprise: Priorities, Practicalities, and Legitimacy. Voluntas 31, 614–626 (2020). https://doi.org/10.1007/s11266-020-00215-8