Policy paper: Understanding mission-led businesses: terms of reference
New businesses are emerging that seek to achieve social as well as financial impact.
These businesses have a mission to address critical social problems. They are choosing to protect this mission without using familiar social sector legal forms, such as a charity or a community interest company. We call these “mission-led businesses”.
A new generation of people want to buy and invest in a different way, and are demanding a broader pool of social investment opportunities. Mission-led businesses are emerging to meet this market demand. They are a growing part of the wider social economy that includes the charitable sector and social enterprises.
This study will examine a particular part of the social economy, being mission led businesses. It will meet the following aims:
Gather data on mission-led businesses: How big is this part of the economy? What are the barriers to growth?
Set out a vision: What is the potential role of these businesses in a healthy UK economy?
Develop recommendations: What can industry and if necessary government do to better support this sector? Any recommendations to government should be limited to issues that fall to the Westminster Parliament.
The study will focus on a particular part of the social economy, being mission-led businesses, and will address the legal and regulatory issues they face.
Mission-led businesses are private profit-making businesses that use their business models to achieve social impact. This commitment is typically codified in the articles and/or supported by its governance and operating model. Mission-led businesses are generally distinct from social enterprises because there have no legal restrictions on how they use or distribute their assets or profits.
The study will focus particularly on businesses that trade in the UK. It will cover organisations already using this model as well as organisations that might take this model in the future.
The legal and regulatory issues faced by regulated social sector organisations (i.e. charities, community interest companies and community benefit societies) and consideration of ethics in business generally (including the wider role of business in society and business regulation) is outside the scope of the study. It will look at business support and/or tax treatment, but not government procurement.
This study will be led by the Office of Civil Society and Innovation in the Cabinet Office.
The study will have a separate expert advisory panel. The panel will be led by Nigel Wilson, CEO of Legal and General, and will comprise around 10 senior figures from the business community and social sector.
Members of the panel will act in a personal capacity rather than represent the views of their firm/organisation. The panel will feed into the work of the study, but all executive decisions of the study will be the responsibility of the leadership team within government.