THINK ABOUT THE SOCIAL LICENCE

in communities

Businesses rarely act in a vacuum Most must coexist with the communities where they are physically situated, where their employees may live, or where their operations may affect the broader environmental, ecological or social conditions of that community

This coexistence depends on a concept known as the “social licence” : the degree to which a community accepts a business based on the quality of the relationship

While it is well-documented that this phenomenon is hard to measure, multidimensional, emotive and intangible, in South Africa it is perhaps even more so, because community leadership is often challenged, nuanced and dynamic

There are also multiple layers of leadership (traditional leaders, religious leaders, elected leaders); and multiple types of communities (rural, urban, periurban, informal, traditional)

Evaluating the legitimacy of leadership in communities with appreciation of these nuances is critical, as well as adopting a “community legitimacy” lens This basically means not closing the door on any stakeholder.

Rigid and formal requirements for consultation are not sustainable In the almost 30 years since full democracy, poor service delivery, limited access to resources and well-documented socioeconomic challenges that may well be a function of state failure have made communities much more sensitive to private sector intrusions

So how can communities make their voices heard apart from expressing their anger through protests, strikes and violent actions? How can we effect meaningful change?

Meaningful change will come through cross-sector and public-private partnerships Taking the social dynamic seriously by honouring corporate citizenship commitments is non-negotiable for business.

This means social and environmental components of organisational success should be considered as core to business operations, and not peripheral They should be measured in the same way as profitability, with CEOs held to account

The role of the private sector is not to replace the role of the state which fails dismally in some respects but rather to act ethically, fulfilling its social contract for its own benefit It shouldn’t be tickbox exercises or a search for compliance without meaningful investment.

CEOs or leaders who are short-sighted enough to think they can take shortcuts in this area should not only be held accountable, but their role should be understood for what it is: sabotaging the reputation and sustainability of the organisations they purport to lead

Visionaries who are inclusive and participatory in their approach will be set apart as effective These are leaders who understand that weak communities are a threat to the sustainability of businesses

Leaders should panic rather than rejoice when there is poor governance in communities because, as nature has shown us, we are all interdependent and should coexist in healthy ways A weakness in one part of the system can lead to destruction of the whole, and therefore exploiting weakness in one part of the system is short sighted

Business also has a role to play in supporting economies in peri-urban areas, which are largely informal If the private sector does not transact with small businesses in communities, the message they are sending is that sustainability of economies in communities is not important While businesses are competitive enterprises driven by profit, and need not apologise for that, ignoring the economic plight of small businesses in communities is short-sighted This is not something that can be solved by endless presentations on what has been spent, but by tangible results of successful enterprises in communities

Not everyone who lives in a periurban community wants to move elsewhere and, despite the complex social challenges in communities, some people born in them genuinely want to see them thrive Not every venture will work, but the will from business and effective stakeholder partnerships could go a long way

In addition to this, actual community entrepreneurs need to rigorously interrogate entrepreneurship programmes and boot camps, which are mostly compliance driven Interrogation of participation in those programmes is also necessary, especially in light of high unemployment rates, as well as the sustainability of slotting jobseekers into entrepreneurship programmes Leaders should understand the economic state of the communities they operate in, and the aspirations of small business owners in those communities

Finally, leaders are stewards of organisational resources on behalf of shareholders and should be decisive about investments in communities, especially initiatives aimed at strengthening economies

When businesses go through cycles, real thought needs to go into where to reduce expenditure and where to allocate capital The interdependence of informal and formal economies, corporate communities and civil society should be a key consideration Social good should not be perceived as the responsibility of international NGOs: all leaders should consciously think about a lasting legacy and meaningful contributions

This means thinking beyond narrow interests, thinking about the social licence a community has entrusted to them, and being good ancestors for generations to come

“Social licence” is a “licence to operate” provided by the communities in which businesses operate

It’ s a licence that needs to be earned because it can be “revoked” by those same communities x is an academic and author on the topic of businesses’s social licence to operate