Governing for impact and performance within social entrepreneurial ventures : the mediating role of organizational capabilities

Social entrepreneurial ventures pursue a double bottom line, i.e., they try to achieve simultaneous social and financial performance. Governance has been shown to be a critical issue for firm performance. However, this issue has been neglected in the social entrepreneurship literature. This exploratory study empirically addresses this gap by proposing a mediational model between governance behaviors (agency and stewardship) and financial performance and social impact. Using Structural Equation Modeling (SEM), we confirm mediation and find that stewardship predicts organizational capabilities, leading to higher social impact. On the contrary, agents’ opportunistic behaviors negatively influence the development of these organizational capabilities. These innovative findings contribute to the understanding of governance behaviors within SEVs and offer interesting insights for the practice of social entrepreneurship.