The Significance of Social License to Operate for Corporations and the Challenges in Legal construction Abstract:

Abstract

Social license to operate (SLO) places greater demands on corporations and corporate gover - nance, providing challenges as well as opportunities for corporations. It offers a method to achieve good governance at a practical level. The underlying theory of SLO is stakeholder theory and corporate social responsibility (CSR). The vitally important aim of SLO is to protect stakeholders' interests, which provides a way for corporations to take social responsibility simultaneously. Companies need a social license because they should also take on other obligations in addition to earning profits, namely social responsibility. In the long term, striving for a social license also benefits corporations to achieve good corporate governance. An excellent social license can help corporations maximize their value and benefit all stakeholders. However, the uncertainty of the scope of SLO and the conflicts among different stakeholders make SLO difficult at the practice level. SLO is part of a pluralistic social governance structure and should be used in conjunction with other regulatory instruments, including legal and political licenses. The legislation of SLO should be done with caution.