You can read our full-length paper ‘Reshaping relations between the state and the private sector post-COVID-19? Exploring the social licence framework‘, in the Journal of the British Academy, here.
We have also produced two shorter consultation documents, “Social Licence for Business” and “A New Social Contract for Business”:
During the pandemic governments across the globe have stepped in as buyer and lender of last resort for private sector firms, taking on huge debt for future taxpayers. While this support is both welcome and necessary, it should also lead to an urgent conversation about the proper relationship between business and society, exploring ways in which the power of business to do good can be harnessed to help us meet the very significant challenges society faces.
- There is a need to ‘build back better’ post-pandemic.
- Current regulatory moves are insufficient to achieve this.
- Steps in the right direction are being taken …
- … but reshaping business-state relations requires rethinking the private sector’s social contract.
- The social licence model could provide the necessary framework.
Scandals such as data misuse events, the flouting of environmental regulations in the car and other industries, and the financial crisis have served to illustrate the mismatch between current business practices and the interests of society. More recently during the pandemic, the extraordinary level of aid provided to the private sector by the state has thrown the interdependence of business and the state into sharper relief than ever. It is now, while governments make plans for rebuilding the economy post-COVID, that we should begin to radically rethink the relationship between the state and the private sector. This is needed to ensure that business becomes a true partner in helping society address the challenges it faces. We urgently need business to do things differently; but how can we bring this change about?
- Reforms should be based on a renewed understanding of the social contract between business and society.
- This renewed social contract gives rise to a requirement for firms to contribute to the social good.
- To ensure organisations do make appropriate contributions to public goods, a system of ethical regulation for business is needed.
- The social licence to operate framework could provide a system for ethical regulation. There is reason to think it could be more successful in creating systemic change than the existing levers of change (standard regulation, self-regulation and consumer activism).