Norms and business operations.
Social norms shape public expectations about how companies should behave and evaluations of how well companies have done so. This, in turn, influences the behaviour of businesses, as corporations aim to avoid reputational damage and remain competitive. In recent years, changes in norms have meant that several once widely accepted practices have become shameful. In the West, the latest emerging norm is associated with inequality and rectifying social injustices.
Shifts in social norms create new reputational risks for companies and can lead to the passage of new legislation or regulation.
Governments may be reluctant to regulate practices or sectors for fear that businesses will move elsewhere.
Legislation may be slow to follow, but breaching norms could still affect the bottom line.
