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Newsletter - March 2012
As we are back from Davos and gearing up for the forthcoming regional meetings throughout the spring, we want to take a moment to share some of the main outcomes from the Forum’s Annual Meeting 2012, which will guide our main pillars of activities throughout the year.
It was an action-packed six days, starting with a half-day of private meetings focused on four main pillars: 1) shaping policy, 2) partnering with corporations, 3) governance, and 4) impact investing. These were then also some of the main themes we explored in sessions throughout the duration of the meeting, including a workspace on “Developing Shared Value Strategies” with more than 50 senior corporate representatives and another session with some of the largest investors in the world on “Impact Investing: Harnessing the Hype”. I'm delighted to share the highlights from our private sessions below.
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Davos Session Summaries on the Schwab Foundation Pillars of Activity
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Policy
Many of you work in jurisdictions that are hostile, or at best neutral, to the social enterprise sector. But that is changing. A number of governments and regional bodies such as the EU are experimenting with various approaches aimed at scaling the sector, and many others are seeking expert advice on what they could do. But if you're a policy-maker seeking clear, unbiased information, where do you turn? The Global Agenda Council on Social Innovation, which is managed by the Schwab Foundation and includes leading Schwab social entrepreneurs, impact investors, and academics, realized there does not yet exist a comprehensive assessment of best practices and policy approaches currently being embraced by governments around the world. As a result, the Council is creating a "policy toolkit" to share with governments and policy-makers who are serious about scaling the sector that outlines the various options they might consider.
The breakout discussion on the policy toolkit yielded important feedback, including suggestions on how to position our work as part of the solution to the jobs crisis that is topping governments' agendas; the need to complement existing examples with many more from emerging markets in particular; and strategies for reaching out to regional bodies such as the Asian Development Bank in addition to national governments.
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Shared Value
In doubling the number of companies partnering with Schwab Foundation to support social entrepreneurs in the past year, we aim to build on our collaboration with the corporate sector in a more structured way. During the Annual Meeting 2012, we dedicated three sessions to the theme of “shared value”, which generated multiple insights on how social enterprises and large companies can partner more effectively. Critical factors for such partnerships to succeed include commitment from top management, alignment with core business objectives, collaborative engagement with key stakeholders and partners, and securing shareholder support.
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Governance
Governance of a social enterprise, if incorporated well, helps to safeguard the mission of the social enterprise while allowing the management team to meet the demands of the variety of stakeholders, including investors, employees, clients or beneficiaries, as well as to comply with public policies and regulations. Yet, few social enterprises use governance as a means for their social enterprise to reach its highest potential. Over the past several months, the Schwab Foundation and the Technical University of Munich collected best practices and insights from social enterprises about the creation of and management of effective governance mechanisms.
During Davos, the breakout group discussed questions and concerns around designing advisory boards, recruiting board members, and managing ongoing communications and decision-making process with the board. These questions and concerns helped to frame the important criteria and levers that social entrepreneurs can use in building and managing their boards. Additionally, several social entrepreneurs revealed that they thought they were able to tap their board members for only a small fraction of what their board members could offer in the form of expertise, experience and networks. To address this need, we created a three-page supplemental document, specifically for board members of social enterprises, on how to optimize their contributions and potential.
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Impact Investing
It is hard to miss the current hype about impact-investing. Investors speak of a market worth US$1 trillion. Social enterprises reposition their business model and restructure their financial model to attract, absorb and grow through investor capital. But the actual volume of transactions is still low, and as one representative from UBS said: “We clearly stand at the beginning and still don’t know if 20 years from now impact-investing will be the dominant form of investing or whether it will be meaningless.”
Credit Suisse published a report on “Investing for Impact”
to which we contributed five case studies. The Global Agenda Council deliberations on the subject were captured in a Stanford Social Innovation Review article.
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