In today’s corporate landscape, the concept of a “social license to operate” has become a critical factor in determining an organisation’s success and longevity, particularly during crises.
A social license to operate refers to the informal approval granted by communities, stakeholders, and society, allowing businesses to function within a specific context. Unlike legal permits or regulatory approvals, this license is built on trust, legitimacy, and mutual benefit, reflecting the alignment of corporate activities with societal values and expectations.
Central to this concept is the understanding that businesses operate within social ecosystems, impacting employees, customers, suppliers, communities, and the environment. Securing and maintaining a social license requires proactive engagement, transparency, and ethical conduct, fostering trust, collaboration, and shared value.
The importance of this license becomes especially evident during crises—whether natural disasters or human-made events. Crises can disrupt operations, damage reputations, and erode trust, making it imperative for organisations to reaffirm their commitment to social responsibility and resilience.
Stakeholders closely scrutinise how organisations respond to crises, evaluating not just operational efficiency but also ethical integrity and social impact. Actions taken during these critical moments significantly influence perceptions of credibility and trust, shaping long-term relationships with employees, stakeholders, and the broader community.
To retain a social license during crises, organisations must adopt a comprehensive approach:
Transparent and timely communication: Share accurate updates and provide opportunities for dialogue, fostering trust and reducing speculation.
Proactive stakeholder engagement: Show empathy, listen to concerns, and collaborate on solutions, building solidarity and collective resilience.
Ethical and responsible conduct: Prioritise the well-being of people and the planet, demonstrating a commitment to long-term sustainability over short-term gains.
By embracing these principles, organisations can reinforce their social license to operate, ensuring resilience and fostering lasting stakeholder trust even in challenging times.
