Governance and accountability
The Oversight Trust – Assets for the Common Good (formerly known as Big Society Trust) is our majority shareholder and ensures we stay on mission. It also oversees the activities of other dormant accounts recipients Access – The Foundation for Social Investment, Youth Futures Foundation and Fair4All Finance. The trust commissions an independent review of each organisation on a quadrennial basis. The very first of these reviews, of Big Society Capital, took place in 2020.
The review, conducted by an independent panel through interviews with a variety of stakeholders, acknowledges we have made substantial progress towards our objectives. This is through our activities as a social impact investment wholesaler, as market builder and through an initiative supporting the establishment of Access – the Foundation for Social Investment and Good Finance. The overwhelming majority of people interviewed by the panel believe that social impact investment in the UK would not have grown to the same extent as it has without our focus, funding and highly-skilled team.
The review identified consensus among investors, investees and other stakeholders, as well as internally within Big Society Capital, on the issues for us to take stock of and consider. These ranged from relationships and influencing government, to culture and governance.
In response, we published a route map of how we intend to rise to some of the challenges highlighted in the review. Many of these plans were already underway or in development before the review, but the review gave us the opportunity to set them out. These plans fall into three broad areas:
Some stakeholders felt aspects of our mission were not understood, and that some felt our capital was priced too cheaply while others felt it was too expensive. We committed to do more to increase understanding of these topics for our stakeholders, develop innovative products and approaches to extend the reach of social impact investment and to develop and strengthen our relationships with investors and investees.
The review highlighted our strong internal culture. It noted that we have a talented staff team with diverse backgrounds both in terms of gender and ethnicity and professional experience, with a high proportion (38%) joining from the social sector. We committed to making sure we maintain and improve our culture of learning, and actively consult and listen to a wide diversity of voices and backgrounds.
We recently commissioned an expert external review on our investment process. It concluded investments follow industry best practice, are in line with our status as a regulated financial services firm and demonstrated an unusually high degree of openness and challenge. However, as the review suggests, there is more we can do to understand and meet the needs of intermediary investees. We will work with organisations going through our investment process to better understand the issues they face and what changes are possible. We will specifically review whether our investment process sufficiently enables funds to provide access to investment for social enterprises and charities serving diverse communities. And we will continue to monitor the performance – and capitalisation - of our intermediary fund managers and provide a range of support both financial and non-financial to enable them to grow.
The Quadrennial Review acknowledged the progress we have made, and confirmed the broad areas where we agree we can do more to improve further. We are excited about meeting the challenges that lay ahead.