Social License to Operate

Rob Campbell

No business operates in isolation. We all need suppliers, staff, financiers and customers. We impact on our communities. What we do matters not just to us but to many others. In my many years in business in a range of capacities I have met no one who really met the caricature capitalist who wanted only freedom to do whatever they wanted and only wanted profit.

We all face some forms of regulation which reflect these wider relationships and impacts. These regulations may (often do) reflect inaccurately or inefficiently, imposing costs not commensurate with their benefits. Whatever, we can and do comply (perhaps grumbling as we do).

In addition to these rules most businesses need to have regard to what has been called a “social license to operate”. The need for this license or social acceptability has become more intense as society has changed with greater recognition of environmental and social impacts from economic activity. I think this is welcome but even if one does not share such wider concerns then it is foolish to ignore them until you face boycott, other rejection or pressure for stifling regulation.

To engage with your community positively will not happen by accident. The business must establish a purpose and set of principles according to which it will conduct itself. To be effective these need to have genuine involvement of the people in the business and be renewed regularly. They are no real use as a piece of paper on a wall.

Then the business must communicate this purpose and these principles to their community. This must be done explicitly and reinforced by behaviour. The community will quickly spot and penalise insincerity. Part of this is the business making itself openly accountable for these. To do that in turn we must seek input and reaction from the community (internal and external). They must be able to respond, to communicate not just through trading with you but reflecting and assisting to develop a better level of support and communication. For the business in turn this means not only an intention to listen but also providing a means to hear.

We can think of this as an ongoing exchange with our communities – not just of money and goods, but of culture (ways of behaving) and expectations.

None of this is utopian. It is simply practical. Without such process a business will not succeed in today’s markets.

 

Rob Campbell is a specialist in investment, investment management and governance. He is chair of Sky City, WEL Group, Tourism Holdings, Summerset Group and a director of Precinct Properties. Rob holds Master of Philosophy. He is an adroit commentator on the times in which we live.

Insights, BrandsBrian Steele