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ASX Abandons Push to Require Companies to Have a Social Licence to Operate

After months of debate, the Australian Securities Exchange last week dumped a proposal to include reference to a “social licence to operate” in its updated Corporate Governance Guidelines. The new guidelines, released on Wednesday, replace “social licence to operate” with terms such as “reputation” and “standing in the community”.

The chair of ASX Corporate Governance Council Elizabeth Johnstone says they are “more likely to be better understood”.

But in practice they don’t mean the same thing.

According to the Australian Financial Review the council came to the view that the phrase was “contentious” and that it would “create problems for companies in the gaming, alcohol, tobacco, fast food and mining sectors” – the very sectors where corporate responsibility is at constant risk, and governance is most needed.

To view the ProBono article in full, click here.

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