Social Licence to Operate and Directors' Duties: Is There a Need for Change?

Abstract

Directors’ duties have received renewed focus in the aftermath of the Banking Royal Commission, with questions arising as to whether directors need more leeway – or increased obligations – to take stakeholder interests into account. At the same time, the concept of social licence to operate was omitted from the final fourth edition of the ASX Corporate Governance Principles and Recommendations, issued in February 2019. In the United Kingdom a new Corporate Governance Code and a new Guidance on Board Effectiveness were enacted in July 2018 with emphasis on the long-term sustainability of companies. Questions arise as to exactly what the contested concept of social licence to operate entails, ..