Updated: Nov 23, 2022
Simone Fox Koob writes a great article in the Herald on the complexities that surround social licence for businesses today. The changing face of the business world is evident in the boardroom’s broadening focus beyond financial returns to environmental and social responsibilities, whilst not new, the risks around it are increasing with little available in the toolbox to guide them through it.
“It used to be that a business will make profits and generally will not be part of the social activism. It is, however, getting more and more difficult for CEOs not to take a stand ... It’s now becoming riskier if an organisation does not.” says University of South Australia associate professor Sukhbir Sandhu.
Sandhu rightly points out that environmental progress shouldn’t come at the cost of social inequity. Governance being the bind. That is why treating all the three pillars of sustainability with equal respect improves one’s social licence to operate. It is because businesses are able to have a more holistic view and contribution to its stakeholders and the community/ies it operates in.
The Ethics Centre’s executive director, Simon Longstaff, sums it up nicely in pointing out that what has changed in recent years is that greater levels of transparency, driven by media and technology are now required. “Companies need to be authentic and sincere; gaps between a company’s actions and what it stands for can be irreparably damaging.”
Businesses with purpose (a vision beyond serving themselves) are in a much better position to navigate the current complexities and retain some influence over the narrative. This is because alongside a purpose comes values which give direction, clarity, authenticity and connections. Ultimately that builds trust and that is a resource that is becoming far more valuable to a business than it ever has before.
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