Measuring and Reporting on Social Performance: From Numbers and Narratives to a Useful Reporting Framework for Social Enterprises

ABSTRACT

This paper examines the need for a framework for social enterprises to measure and report on social performance. Reviewing social reporting practice, and concepts central to financial reporting, this paper presents a framework for social performance reporting in the context of social enterprises. A Statement of Social Performance and is developed, through consideration of social reporting approaches, influences, and issues in third sector and private sector organisations. This Statement is applied in the context of an employment and training social enterprise, demonstrating its application in practice.

Acknowledgements

The author would like to thank Professor Bino Catasus for his feedback and the comments of others in developing this paper when presented at the Critical Perspectives on Accounting Conference in Toronto, 7–9 July 2014.

Notes

1. Wicked problems are referred to as those considered difficult to solve because of incomplete and contradictory information, the number of people and opinions involved, the large economic burden, and the interconnected nature of these problems with other problems (see Rittel and Webber 1973).

2. While stewardship and decision-useful functions of reporting have been considered as distinct, parallel objectives (IASB 2006), it has also been argued that the information required for each function is essentially the same and that the objectives are complementary (Lennard 2013).

3. In practice, however, various social enterprises have been noted as struggling to establish financially sustainable businesses, continuing to rely on grants and donations (Thompson and Doherty 2006).

4. ROI = profit/investment cost.

5. Appendix B ‘Application guidance’ of the AASB's draft Exposure Draft is referred to as ‘integral’, but has not yet been developed.

6. For example, size of a company's board being used as a proxy measure for community engagement. For other concerns regarding engagement, see Cooper and Owen (2007) who refer to the lack of engagement even for ‘leading’ award winning CSR reports.

7. An organisation may consider a dollar value most appropriate for volunteer time worked by employees, based on their normal hourly rate for time given beyond contractual employment hours. However, another organisation may consider the number of hours volunteered as a more appropriate measure given payment would not have been made in lieu of hours worked.