Why is stakeholder engagement so important?
In a time of decreasing trust of large businesses, stakeholder engagement is increasingly becoming a focal point because getting it right can help drive value within a business.
But many businesses are still failing to effectively engage with their stakeholders, arguably the most important of which are their employees. In the UK, only one in three employees say they love their job and as many state they don’t give a damn. Yet there is optimism for the future as regulation changes have connected boardrooms with stakeholders and champions have emerged promoting the need for change.
With stakeholder engagement now on the governance and reporting agenda as never before, the question becomes whether all companies are poised to take advantage of these changes.
Stephen Butler – putting stakeholder engagement front and centre
Our Director of Stakeholder Engagement, Stephen Butler, outlined the recent regulation changes and outlined why connecting with your stakeholders is so critical.
In his overview of changes covering the Corporate Governance Code 2018 and the Companies (Miscellanous Reporting) Regulations 2018, Stephen discussed how regulatory shifts now require stakeholder interests to be considered by the board when determining the direction of the company.
Not only is this necessary for legislative reasons, the changes are also aimed at helping to rebuild trust in businesses whilst aiding the level of communication and understanding between the board and stakeholders.
Stephen discussed what best practice looks like and gave examples of early-adopting companies. Engagement, integration, employee satisfaction and, ultimately, improved return on investment (ROI) are just some of the consequences that flow from stakeholder engagement done well.
Sheila Parry – Take PRIDE
Next up was Sheila Parry, author of the guide to building organisational success through people, Take PRIDE. Sheila detailed how engagement with employees is often overlooked by the decision makers of an organisation, many of whom fail to realise that, today, a job is more than just a job or that the first thing many of us do as we wake up is check our inbox. Leaders must now understand that their employees are shaped by where they work and how they engage with their company.
The ability of an employee to take pride in their work is therefore essential to them feeling good about their working life. Their involvement becomes emotional, something very personal to them, and should allow them to become the biggest champion of the brand.
The PRIDE methodology is a toolkit to help leaders and influencers think differently about how their stakeholders interact with the company in which they work.
Take PRIDE – What it takes to achieve good stakeholder engagement:
- Purpose: believe in your purpose and values
- Reputation: the reputation of your products and services
- Integrity: evidence of brand integrity and positive employee experience
- Direction: excitement about the future direction of the company
- Energy: an energising culture and people help deliver ROI
Sheila Morrison – The Luminous approach to brand engagement
And finally, our Brand Director, Sheila Morrison, outlined how an organisation’s brand can be used to drive employee engagement as well as connection to a wider stakeholder audience. Step by step, Sheila outlined exactly how to articulate a brand and inspire stakeholders through a clearly defined purpose, personality, proposition and values.
Done well, a brand educates and engages stakeholders across an organisation, creates impact, encourages association and builds a legacy that lasts. Sheila gave examples of how to achieve this, including the creation of brand values films, workshops and other engagement activities, and showcased some examples of best practice.
The Luminous view
Stakeholder engagement needs to be more than ‘just’ reporting. When done well, it provides meaning to employees or a reason for an investor to invest; it can encourage a customer to share your purpose or inspire suppliers to collaborate with you. Getting to grips with stakeholder engagement could be many businesses’ best move.
If you would like to discuss how you can better engage with your stakeholders, or are interested in finding out how Luminous can help you understand stakeholder regulation changes, please get in touch with Stephen Butler, Director of Stakeholder Engagement at Luminous.