Social license to operate an NFP entity

While The Age article by Louise White ‘CSIRO is tackling corporate trust issue, starting with mining‘ (18/6) is mainly about how mining companies can more effectively engage with communities affected by their proposed developments, it spurred me to have another look at the concept of the ‘social license to operate’ (SLO) as it applies to not-for-profit entities.

In a 2013 article in The Conversation, Justine Lacey, a CSIRO Social Scientist, noted that at that time, the concept of a social license had been operative in the mining sector for over 15 years.

My work in 2010 with the Victorian Branch of the Australian Dental Association on adoption of ISO/DIS 26000:2010 Guidance on social responsibility, to assist the Council committees and staff to work in a socially responsible and sustainable manner, demonstrated to me that SOL concepts had already spread well beyond the mining sector. During that project, we were able to evoke the long tradition of professional ethics, and the existence of a ‘social contract‘ dating back to Hobbes’ Leviathan (1651) and Rousseau’s Du Contrat Social (1762). They in turn referenced principles enunciated by Aristotle in his Politics, amongst other sources and progenitors.

In Ms Lacey’s article, she drew attention to the distinction between government licensing (regulation and perhaps also registration) and a social license:

“Respondents to the CSIRO research described an environmental licence as a formal permission issued by government in line with legislated requirements, whereas they saw a social licence as something their companies needed to earn from their communities.

Legal and social licences also vary in their temporal nature with the environmental licence being issued by government and enduring as long as a company complies with the relevant conditions of the licence whereas a social licence is constantly being renewed and negotiated; reflecting the natural fluctuations in the status and quality of a relationship between a company and a community.” (emphasis added)

In the light of developments such as those highlighted in my previous posts about Learning from others’ mistakes, it is evident that not-for-profit entities need to be at least as sensitive to their social license to operate as commercial entities.  Given the extent to which their purpose is to support the community and their reliance on ‘trust’ to be able to achieve their missions, NFP Boards should regularly gauge stakeholder and community views on their SLO.

Policy development or review

If your board would like assistance in developing a social responsibility policy, or reviewing means by which to assess your SLO, please contact me on 0419 347 599 or by email at

See also:

Information about the CSIRO’s Reflexivity service

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