Understanding the ‘Licence to Operate’


COMPANIES, like people, do not exist in a vacuum. They are surrounded by members of the community, each with their own often overlapping, conflicting agendas and demands, acting as customers, employees, investors, taxpayers and citizens.

In return for allowing the company to go about its business, the community expects the company, through its board decisions, to behave responsibly, though the definition of responsible behaviour varies by group and over time. This is what is meant by the “licence to operate” (LTO).

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