Stakeholder Engagement still a concern for many boards

The Governance Evaluator 2019 Benchmark Report has identified for the second year in a row Stakeholder Engagement as the number one risk for boards.  

An analysis completed by Governance Evaluator looked at boards who have improved their performance year-on-year in this area and identified some of the key actions these boards had taken for addressing their gaps.  Following is a summary of some of the actions taken that have resulted in these boards having greater confidence in their stakeholder engagement capabilities.  

Assessment 

Following their board governance evaluation in 2018 and the identification of stakeholder engagement as a potential gap for their board, boards went on to dig deeper into their capabilities in this area, through:  

• Assessment of individual directors’ skills and experience for stakeholder engagement 
• Identification of individual directors’ connections and relationships with potential key stakeholders 
• Assessment of who were their key stakeholders and identification of any special requirements. 

Planning 

Based on the outcomes of the assessment, these boards went on to create targeted Key Stakeholder Engagement Plans which addressed:  

• Prioritised levels of importance of each stakeholder in relation to the organisation’s strategy with specific strategies for approaches and responsible persons, inclusive of directors and executives.  It is important at this stage for the board not to abdicate responsibility for stakeholder engagement to executives, rather identify those stakeholders that are best managed by each level of the organisation, including the board. 
• Clear reporting structures and KPIs for measuring stakeholder engagement effectiveness that went beyond number of visits. 

Training 

Some boards felt that going back to basics was necessary to ensure a clear understanding of the importance of stakeholder engagement to the organisation.  

• Board members, CEOs and Executive teams received training on best-practice approaches to stakeholder engagement. 
• Other boards provided key message training to its members so that they could build their confidence to talk about why their organisation exists and have a greater understanding of the communities they serve and its current priorities. 

Strategic planning influenced by stakeholders 

Stakeholders and communities served by an organisation should factor in the organisations strategic planning process.  

• We saw some boards introduce presentations from stakeholder representatives at their strategic planning days, whilst others invited key stakeholders to participate fully in the planning sessions. 
• Other boards communicated the organisations strategy to stakeholders and invited feedback. 

Ongoing engagement, communication and feedback  

We saw a range of initiatives from our boards throughout 2019 to build their capabilities for engaging, communicating and receiving feedback from their stakeholders.  

• Establishment of Consumer/Client Advisory Committees or a review of the Terms of References of present ones. 
• Establishment of a Stakeholder Advisory Committee to meet on a quarterly basis. This is different to a Consumer/Client Advisory Committee and enables the board to have face to face engagement with stakeholders on specific topics relating to mutual interest and at a strategic level. It is also used to test ideas, discuss advocacy and policy priorities and actions, along with joint collaborations such as funding proposals and key messages. 
• Introduction of a key stakeholder mapping exercise with the Board, executive team and senior staff members to better understand their personal networks and relationships to their Stakeholder Engagement/ Communications Plan.  It’s important to identify existing relationships so that there can be clear communication and to manage key person risk if that person leaves or discontinues being involved. A “buddy” approach is a good way to enable more than one person to be introduced and lessen the dependency. 
• Implementation of a Customer Relationship Management system (CRM) or database of contact details. Many people hold the contact details in their phone or email and it is not centralised and accessible to all.  One social enterprise, identified their stakeholders, segmented them into different categories and then added their details to a CRM. They are now communicating with people to ask them to “Opt In” to subscribe to their general newsletter and have the ability to tailor the communication methods and messages according to the audience/segment. 
• Utilisation of video to communicate messages with subtitles, not just relying on written words. This approach acknowledges the different ways in which people consume information, rather than a one size fits all. 
• Quarterly “Letter from the Chair” to key stakeholders. 
• Extending invitations to key stakeholders to their events and/or board meetings. 
• Addition of stakeholder events to existing events or following a board meeting in different parts of their regions or campuses to ensure all stakeholders are being reached. 

Measurements/outcomes 

We’ve seen boards introduce new metrics for measuring the effectiveness of their stakeholder engagement efforts. This includes metrics that go beyond the number of visits or meetings, including measuring the health of the relationships with stakeholders through:  

• Independent review 
• Interviews 
• Feedback 

This has given boards and executive teams insight into how stakeholders view the organisation, including the communication they receive and their trust in the organisation.  It also gives the board some early warning signs of relationships that might not be as good as originally believed.  

If you or your organisation are taking action to build your stakeholder engagement capabilities, we’d love to hear what you’re doing, contact us today and chat with one of or experts.