Beyond legal compliance, traders need social licence

Hawkers sell their wares along Latema Road, Nairobi

Hawkers sell their wares along Latema Road, Nairobi on March 21, 2023. As businesses navigate the murky waters of politics, it is increasingly clear that acquiring a legal licence to operate is not enough to shield them from risks posed by factors such as politically instigated product boycotts.


Photo credit: Bonface Bogita | Nation Media Group

As businesses navigate the murky waters of politics, it is increasingly clear that acquiring a legal licence to operate is not enough to shield them from risks posed by factors such as politically instigated product boycotts.

Every company must also seek a ‘social licence to operate’ as a way to mitigate these risks.

Social licence to operate refers to the acceptance and approval of a company’s operations by the local community and other stakeholders.

This means that businesses must not only comply with legal requirements but also ensure that they operate in a socially responsible manner that meets the needs of all stakeholders.

Conformist strategy 

One way of acquiring a social licence to operate is through a conformist strategy. This involves aligning their operations to the values and expectations of the local community and other stakeholders. 

To that end, businesses must listen to the concerns of their stakeholders and make changes to their operations based on those concerns.

Another way to gain a social licence to operate is through a manipulative strategy. This involves using public relations and other communication strategies to create a positive image of the company in the eyes of all stakeholders. 

Businesses must communicate their values and commitments and take concrete actions to show that they are truly committed to these values.

As political risks escalate in Kenya, businesses must focus on the needs and expectations of others and act in a responsible manner to gain social acceptability and goodwill. This ultimately reduces their exposure to political risks.

Mr Keya is Strategy Advisor, Wylde International.

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