Social impact investing discussion paper

Our submission addresses the regulatory and governance environment in which NFPs operate as it relates to social impact investing and how the Australian Government could facilitate such investment through:

• Reducing the regulatory burden on NFPs (which is costly and, as a result, reduces the potential of social impact investments to achieve market returns);
• Providing guidance on the operation of an Australian social impact investing market, including on how such investments relate to NFP status and tax; and
• Supporting the development of social impact measurement.

Of critical importance to our submission is our view on whether a legal impediment exists that prevents directors of social enterprises from making decisions in accordance with the constitutional mission of the enterprise, rather than maximising financial returns.

The AICD considers that there is no such legal impediment, and that the law already provides flexibility for directors to consider and balance the interests of a range of factors in their decision-making, in furtherance of an enterprise’s mission.