Licence to operate
[Re: Cable is fighting yesterday’s battle, yesterday]
Whether Allister Heath likes it or not, the “licence to operate” – a term first popularised by Tomorrow’s Company when protestors were attacking Shell’s petrol stations over the Brent Spar crisis two decades ago – is a reality for free enterprise everywhere. This is not about enterprise needing permission from politicians. Without the frameworks of law, education, health, infrastructure, clean air, and water that society provides, there’d be no foundations on which to build free enterprise. So of course business has to respect its licence to operate from that society. Jamsetji Tata, founder of the Tata group of companies and one of history’s great entrepreneurs, is said to have described business as a “wholly owned subsidiary of society”. He also said that “in a free enterprise, the community is not just another stakeholder in business, but is in fact the very purpose of its existence”. Businesses which forget this rarely create lasting shareholder value. Our own research indicates that a common feature of businesses which have endured over decades is that their sensitivity to society helps them to innovate. One recent study of 50,000 brands across the world found that companies that put people’s lives at the centre of all they did outperformed the stock market average by 400 per cent over ten years.
Mark Goyder, founder, Tomorrow’s Company
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