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Achieving, maintaining, and repairing social licence to operate

By Dr Bree Hurst, Senior Lecturer, QUT, Prof Kim A Johnston, and Dr Anne B Lane, Queensland University of Technology

  • Research highlights the benefits to an organisation of having a social licence to operate (SLO) include trust, credibility, an improved reputation, ongoing access to resources, improved market competitiveness, and positive employee engagement.
  • SLO needs to be understood as a continuum of multiple licences across various scales rather than a one-off permanent licence.
  • How can an organisation achieve, maintain, and repair a SLO?

The recent Future of the Board report[1] found social licence to operate (SLO) is perceived to be the top ethical challenge board directors will face in 2025. Compounding this challenge is the arguably subjective nature of what a social licence is (or is not), and the complexity and uncertainty the nebulous nature of this concept creates for organisations.

That being said, research also highlights the concrete benefits to an organisation of having a SLO including trust, credibility, an improved reputation, ongoing access to resources, improved market competitiveness, and positive employee engagement. Conversely, in the absence of a SLO, organisations can face delays, boycotts, community anger, increased regulation, and in serious cases, failure of a project or even the organisation itself. Organisations that fail to take the concept of SLO seriously, do so at their own risk.

What is a SLO?

In simple terms, SLO aligns with the notion of social acceptability. Social acceptability refers to a generalised perception of whether the organisation meets the demands and expectations held by local stakeholders and broader society about how the organisation should operate[2]. If the organisation is perceived to meet these demands and expectations, a metaphorical ‘licence to operate’ is said to be granted to the organisation by the society in which it functions — hence, ‘social licence to operate’.

Importantly, researchers suggest that rather than being a one-off permanent ‘licence’, SLO needs to be understood as a continuum of multiple licences across various scales — ie, local, regional, national, international, communities of place (geography) and/or communities of interest — which should be negotiated between the organisation and its stakeholders[3]. This notion highlights the dynamic nature of SLO, in the sense that what is considered socially acceptable not only changes over time, but may also vary between stakeholder groups.

This fluidity raises questions about how an organisation can achieve, maintain, and repair a SLO.

Achieving a SLO

Organisations should not assume that they automatically have a solid SLO. To illustrate this point, while there may be some acceptance of the organisation by stakeholders, this does not necessarily mean that organisation is approved of, ie, that it is perceived as being trustworthy, credibility, and/or legitimate, all of which are indicators of a strong SLO.

To achieve a strong SLO, organisations need to move beyond a risk management approach that sees SLO as something that can be controlled by engaging with certain stakeholders in a tokenistic way. In fact, research suggests social licence, or perhaps more accurately, the social approval needed to achieve a SLO, cannot be controlled or managed. But steps can be taken to legitimately consult and engage with stakeholders to help make the granting of a SLO at the various scales more likely. To do this effectively, organisations need to view SLO as a collaborative, inclusive, and on-going relationship building process which seeks to achieve mutual benefit where possible.

Adopting a reflexive or relational approach to SLO puts the onus on organisations to prove they have a SLO, rather than leaving it up to stakeholders and/or the community to prove the organisation does not have a SLO. This approach requires an organisation to conduct research and engage with a wide range of diverse stakeholders to determine whether the organisation is acting in line with social expectations and perceptions before claiming they have a SLO.

Given trust, legitimacy, and credibility are key hallmarks of a SLO, these characteristics should also apply to any communication and engagement the organisation conducts with stakeholders around its SLO. This means organisations need to engage and listen to a broad range of stakeholders, implement changes — or at the very least, explain why certain changes cannot be made, communicate facts in an open and transparent manner, and create a shared vision/s with stakeholders around what the organisation should be doing to ensure it is considered worthy of approval in the eyes of various stakeholders. In recent times, this has come to mean organisations need to demonstrate they are meeting criteria other than profitability, including contributing to the development of a fully functioning civil society.

Maintaining an SLO

Once an organisation has determined that it possesses a SLO, attention can be turned to maintaining or improving its SLO. While operational impacts play a crucial role in maintaining a SLO (ie, impacts on the community or the environment), procedural fairness, quality of contact, promise keeping, and the development of a shared agenda have also been found by researchers to be important in fostering a strong SLO. Each of these are briefly elaborated on below.

Procedural fairness

  • Procedural fairness has consistently been found to be the strongest predictor or trust, which in turn, contributes to a strong SLO[4].
  • Procedural fairness is the extent to which an organisation listens to, and respects, stakeholders’ opinions and views, and makes changes to its practices in response to these opinions and views.
  • It can be achieved by implementing stakeholder engagement processes that are fair, transparent, and inclusive of diverse stakeholders; by legitimately respecting and listening to stakeholders; and by ensuring stakeholders have a voice in decision making processes.

Quality of contact

  • Quality of contact refers to contact or interactions between the organisation and/or its representative/s and stakeholders.
  • Research has found the more positive and pleasant the contact is between the organisational representatives and stakeholders, the most trust stakeholders have in the organisation[5].
  • Quality of the contact is more important than the quantity of the contact. This means the organisation should invest time in building and maintaining ongoing relationships, rather than ad-hoc engagement practices.

Promise keeping

  • Promise keeping refers to whether the organisation does what it says it will do.
  • Transparency is important in communicating about the promise, in that the organisation needs to not only communicate what promises it has made, but also what actions have been taken as a result.
  • If promises cannot be kept, the organisation needs to explain why this is the case.

Developing a shared agenda

  • Developing a shared agenda involves working with stakeholders to develop shared values and goals and sharing problems and decision making with stakeholders where possible.
  • A shared agenda does not necessarily mean the organisation needs to give into all stakeholder demands, but it does mean the organisation needs to be clear about procedures and processes around how decisions are made that have an impact on stakeholders and/or a community.

Given the dynamic nature of SLO, and because societal norms and expectations can shift over time, it is important to note here that the maintenance of a SLO is an ongoing process and requires an ongoing strategic commitment by the organisation

Repairing SLO

Where organisations fail to meet stakeholder expectations, the organisation’s SLO can be threatened or even withdrawn. If this has happened, it is likely the organisation has failed to adopt a reflexive or relational approach to SLO and therefore has not legitimately engaged with stakeholders, and/or has failed to view SLO as something that continuously needs to be negotiated.

If the organisation’s SLO has been damaged, steps need to be taken to rebuild the trust and credibility of the organisation. To do this, the organisation needs to forensically examine why its SLO has been damaged. This involves critically looking internally at organisation’s practices, culture, and leadership, as well as externally at social norms and stakeholders’ expectations and perceptions to determine what happened, but also why it happened. Using this information, the next step involves making appropriate changes internally, but crucially, this will only be effective if the organisation is willing and open to working with stakeholders to make genuine changes. Investment also needs to be made in rebuilding relationships with stakeholders, through things like internal change programs and improved, ongoing community engagement.

There is no quick fix if an organisation’s SLO has been damaged, so boards and managers need to understand that repairing a SLO takes time and commitment, and that they will need to ‘walk the talk’.

A final word

Recent cases, like Rio Tinto and AMP, illustrate the negative reputational impacts that come when an organisation’s various SLOs are challenged, and stakeholders demand action and accountability from the top. Taking a reflexive or relational approach to SLO that emphasises ongoing relationships with diverse stakeholders built on trust, credibility, and legitimacy, as opposed to a risk management approach, will be crucial for organisations and boards to create long term value and realise the positive benefits of achieving and maintaining SLO. Such an approach requires greater investment by organisations to authentically understand shifting social expectations, differing requirements within and between stakeholder groups, and the organisation’s actual and perceived roles in the eyes of stakeholders and communities.

Dr Bree Hurst can be contacted on (07) 3138 2777 or by email at Prof Kim Johnston can be contacted on (07) 3138 4089 or by email at Dr Anne Lane can be contacted on (07) 3138 2312 or by email at

[1] Governance Institute of Australia. (2021). Future of the Board Report. Retrieved from

[2] R Parsons, & K Moffat, (2014). Constructing the meaning of social licence. Social Epistemology, 28(3-4), 340‒363

[3] M Dare, J Schirmer, & F Vanclay, (2014). Community engagement and social licence to operate, Impact Assessment and Project Appraisal, 32(3), 188-197.

[4] K Moffat, & A Zhang, (2014). The paths to social licence to operate: An integrative model explaining community acceptance of mining. Resources policy, 39, 61-70.

[5] K Moffat, & A Zhang, (2014). The paths to social licence to operate: An integrative model explaining community acceptance of mining. Resources policy, 39, 61-70.

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