Foundations can become ‘social enterprises’

Semi-public sector organisations which take advantage of new laws to turn themselves into ‘social enterprises’ will be able to attract private capital and pay out dividends if draft legislation proposed by justice minister Ernst Hirsch Ballin becomes law.

The new corporate structure is meant for housing corporations, health care institutions and hospitals, schools and other entities which are currently set up as foundations and associations. Shareholders will also be able to name members of the supervisory boards.
These small organisations, often once staffed by volunteers, have grown into large, professional organisations, Hirsch Ballin said in a note to MPs. Their financial needs and the needs of society are making new demands on them, hence the new corporate structure the minister said.
Nevertheless, it is important that these enterprises’ social functions remain more important than that of shareholders, Hirsch Ballin said. The decision on whether or not to pay dividends will be up to the board, which may not risk the continuity of solvency of the company, he said.
The Financieele Dagblad reports that the Christian Democrat party in particular is behind the wish to set up social enterprises. Health minister Ab Klink wrote a report about the idea while head of the party’s academic institute, the paper says.
Klink has been struggling with what to do about several hospitals which want to be taken over by insurance companies. This option would solve that problem.
Liberal MPs are opposed to the plan, fearing the veneer of ‘social’ involvement means these companies will be vulnerable to competition and not properly monitored by government. The party managed to stop the social enterprise concept being brought in during the last cabinet period, the paper says.

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