Social

Strong social practices are fundamental for good governance under King IV guidelines. This framework goes beyond short-term profits, advocating for ‘inclusive capitalism’. Here, businesses consider not just financial capital, but also human, intellectual, social, relationship and natural capitals. This holistic approach recognises that a company's actions have a ripple effect, impacting society and the environment.

The social impact a company has can be both positive and negative. Positive social impact strengthens a company's reputation, attracts and retains talent and builds customer loyalty. Conversely, negative social impact can lead to boycotts, reputational damage and regulatory issues. King IV emphasises the importance of managing this social impact by engaging with stakeholders (principle 16). Stakeholders include employees, customers, communities and investors. By understanding their needs and concerns, businesses can proactively address social issues.

This proactive approach unlocks growth and resilience opportunities. By investing in social responsibility, businesses can build trust with stakeholders, leading to a more stable and loyal customer base. Additionally, a focus on social impact can spark innovation as companies develop solutions to social challenges. This innovation can create new product lines or services, leading to further growth. 

BDO can assist businesses in developing strategies for stakeholder engagement, managing social impact and ensuring they maintain a social licence to operate.