ICRS Board Perspectives on Stakeholder engagement: listening in today's world
Across all sectors of business, we are seeing multi-factor pressure for change from investors, customers, suppliers, employees and communities, putting increasing expectations on companies to respond to environmental, social and governance (ESG) issues.
In addition, high-profile activism and boycotts are forcing companies to react quickly and decisively on often complex challenges. While this attention can be the catalyst for positive change, it can also lead to knee-jerk reactions and, ultimately, reputational damage.
This edition of Perspectives explores how CRS professionals can help business to manage this pressure and what actions we can take.
Anita Longley, Chair of ICRS
Recent campaigns have led to a number of U-turns on much-publicised decisions, often made as a result of a poor understanding of stakeholders and too much inward focus.
Companies must be more open to challenge, act on the feedback they receive and provide information on their dialogue, rather than just make high-level statements. They must endeavour to build consensus across all stakeholder groups, as much can be gained by engaging critics. It’s important to establish a clear policy and framework for engagement, to be transparent about decision-making, and to link it to purpose and values. Effective stakeholder engagement is information-rich, continuous and inclusive.
David Logan, Author and Consultant
Stakeholders are those who have a ‘stake’ in a business and do not necessarily hold shares in it. The size of that stake can be measured and it is no accident that stakeholder theory has developed as an antidote to the idea of shareholder supremacy. For example, employees earn their living by working for a company, customers depend on the quality of that company’s products and suppliers have their contracts to provide supplies which, if they are terminated, have a big impact on the viability of their own business. Similarly, communities depend on the jobs and local taxes firms contribute and shareholders get an income from a business’s activities.
It is no wonder that companies are pushed to regard the interests of other stakeholders as well as shareholders. When the Companies Act of 2006 was enacted, it tentatively touched on these issues in section 172. Now, the Better Business Act campaign is leading the way to make stakeholder theory a central part of business responsibility – and good luck to it.
Karin Mueller, Director, Leibfrog
Listening skills are still underrated. We are so used to listening with a view to providing a clever response that we often miss what is really being said. Effectively tackling the complex issues of our time needs a systemic approach, including collaboration with the stakeholders who challenge our views and perspectives the most. For this, better listening – with an aim to understand rather than respond – is fundamental.
Jennie Galbraith, Head of ESG, BAT
Stakeholder engagement is not just the domain of the ESG team; it is something that needs to be embedded across a business. Reporting requirements ensure that listening and responding to stakeholders is an essential element of any successful business. But how can sustainability professionals support this engagement?
Among other things, we must maintain an external perspective, bringing insights from our networks. It is about making our companies aware of the dynamic local and global environment, putting challenges into perspective, and offering solutions that will support companies in delivering value to all stakeholders.
Andrew Wilson, Independent Consultant
Involving stakeholders in shaping how a company is run is a central tenet of successful, innovative and inclusive business practice. For me, there are three key criteria for meaningful stakeholder engagement. Firstly, understand who the most important stakeholders are. You need to prioritise who can directly impact your business to be effective. Secondly, engage these people early, often and in a responsible way that shows you are responding to their concerns. And finally, don’t forget delivery. While you need to engage stakeholders to achieve buy-in, consultation should not be an excuse for prevarication or inaction. Getting a broader, longer-term perspective from your stakeholders will help your business ride out the shocks and bumps of commercial life.
Rachel Woolliscroft, Co-Founder and Director, BayNel
The latest advances in digital technologies have changed the way companies communicate with their stakeholders. However, increased digitalisation does not mean that the fundamentals of stakeholder engagement change: after all, it has been – and always will be – about people.
The successful use of technology in any stakeholder engagement practice is dependent on really listening to stakeholders and ensuring they feel their voice is both heard and valued. What digitisation does do is change the dynamics of communication and the way you build and maintain relationships with your stakeholders. Technology can add real value to the process so that their expectations are met, you co-create and, most importantly, people remain at its heart.
Dr Sam Healy, Director of CR, QinetiQ
Engaging our core stakeholders – our customers, shareholders and employees – has always been a vital part of our CR&S strategy and, like many, we have seen a significant increase in focus on sustainability. While public reporting on our progress and plans is clearly important, our priority is to create trusted relationships where can talk about what matters. We meet regularly with investors to discuss ESG. We engage with employees through awareness campaigns and Special Interest Groups. And our sector sustainability working group, which I now chair, brings customers and peers together regularly to discuss best practice and share challenges. This approach is critical for building trust and embedding sustainability across our sector.