Stakeholder Engagement: values, business culture and society

Speed read

The relationship between companies and the society from which they derive their licence to operate is critical to their long term future. Yet, as with everything else the company does, it will reflect the values and culture it has chosed to adopt from the outset.

External relationships cannot therefore be considered on their own. A company which seeks to build a positive relationship with a wide range of external stakeholders must be clear what its values are, and its own behaviour must be consistent with the message it gives to stakeholders. A company which claims values which it does not adhere to will be found out and exposed quickly by social media. Openness is critical, especially in a crisis.

This report makes a clear distinction beween engagement between companies and their shareholders and relations with non-financial stakeholders. The former are a board matter because boards are directly accountable to shareholders. Relations with other stakeholders are also critically important, but the board's role is more generally an oversight one. As to non-financial stakeholders, a key relationship is with customers. Other important stakeholders singled out are suppliers and regulators. In both cases long term relationships based on openness and trust pay off.