Proposed Model of the Relationship between Internal Governance Mechanism and Sustainability of Social Enterprises

Abstract

A proper governance system and legal structure under which social enterprises can be established and operated are currently not in place in Malaysia. This study aims to examine the direct relationship between internal governance mechanism and sustainability of social enterprises. The board structure and characteristics are the emphasis of the internal governance mechanisms in this research. Meanwhile, financial, non-financial and social or environmental sustainability performance are combined to determine the success of social enterprises which refer to social enterprise's ability to sustain and survive. Based on the proposed conceptual model, this study concludes that internal governance encompasses important mechanisms that can be controlled within the organisation that are crucial for the sustainability of social enterprises as an emerging sector in Malaysia.