Stakeholder engagement
Encyclopedia
Stakeholder engagement is the process by which an organisation involves people who may be affected by the decisions it makes or can influence the implementation of its decisions. They may support or oppose the decisions, be influential in the organisation or within the community in which it operates, holds relevant official positions or be affected in the long term.
Stakeholder engagement is a key part of corporate social responsibility
(CSR) and achieving the triple bottom line
. Companies engage their stakeholders in dialogue to find out what social and environmental issues matter most to them about their performance in order to improve decision-making and accountability. Engaging stakeholders is a requirement of the Global Reporting Initiative, a network-based organisation with sustainability reporting framework that is widely used around the world.
Involving stakeholders in decision-making processes is not confined corporate social responsibility
(CSR) processes. It's a tool used by private and public sector organisations, especially when they want to develop understanding and agree solutions on complex issues or issues of concern.
An underlying principle of stakeholder engagement is that stakeholders have the chance to influence the decision-making process. This differentiates stakeholder engagement from communications processes that seek to issue a message or influence groups to agree with a decision that is already made. The Environment Council developed the Principles of Authentic Engagement. These are intended to provide a framework for geniune stakeholder engagement.
The practitioners in stakeholder engagement are often businesses, non-governmental organization
s (NGOs), labor organizations, trade and industry organizations, governments, and financial institution
s.
Agreeing on the rules of engagement is integral to the process. It is important for everyone to understand each party's role.
Buy-in is essential for success in stakeholder engagement. Every party must have a stake in the process and have participating members have decision-making power. Every party must be committed to the process by ensuring action based on the decisions made through the engagement.
No decisions should be already made before commencing stakeholder engagement on the issue. It is integral that the dialogue has legitimacy in influencing the decision.
.
Stakeholder engagement is intended to help the practitioners fully realise the benefits of stakeholder engagement in their organization, to compete in an increasingly complex and ever-changing business environment, while at the same time bringing about systemic change towards sustainable development.
Stakeholder engagement is a key part of corporate social responsibility
Corporate social responsibility
Corporate social responsibility is a form of corporate self-regulation integrated into a business model...
(CSR) and achieving the triple bottom line
Triple bottom line
The triple bottom line captures an expanded spectrum of values and criteria for measuring organizational success: economic, ecological, and social...
. Companies engage their stakeholders in dialogue to find out what social and environmental issues matter most to them about their performance in order to improve decision-making and accountability. Engaging stakeholders is a requirement of the Global Reporting Initiative, a network-based organisation with sustainability reporting framework that is widely used around the world.
Involving stakeholders in decision-making processes is not confined corporate social responsibility
Corporate social responsibility
Corporate social responsibility is a form of corporate self-regulation integrated into a business model...
(CSR) processes. It's a tool used by private and public sector organisations, especially when they want to develop understanding and agree solutions on complex issues or issues of concern.
An underlying principle of stakeholder engagement is that stakeholders have the chance to influence the decision-making process. This differentiates stakeholder engagement from communications processes that seek to issue a message or influence groups to agree with a decision that is already made. The Environment Council developed the Principles of Authentic Engagement. These are intended to provide a framework for geniune stakeholder engagement.
The practitioners in stakeholder engagement are often businesses, non-governmental organization
Non-governmental organization
A non-governmental organization is a legally constituted organization created by natural or legal persons that operates independently from any government. The term originated from the United Nations , and is normally used to refer to organizations that do not form part of the government and are...
s (NGOs), labor organizations, trade and industry organizations, governments, and financial institution
Financial institution
In financial economics, a financial institution is an institution that provides financial services for its clients or members. Probably the most important financial service provided by financial institutions is acting as financial intermediaries...
s.
Components
Partnerships, in the context of corporate social responsibility interactions, are people and organizations from some combination of public, business and civil constituencies who engage in common societal aims through combining their resources and competencies, sharing both risks and benefits.Agreeing on the rules of engagement is integral to the process. It is important for everyone to understand each party's role.
Buy-in is essential for success in stakeholder engagement. Every party must have a stake in the process and have participating members have decision-making power. Every party must be committed to the process by ensuring action based on the decisions made through the engagement.
No decisions should be already made before commencing stakeholder engagement on the issue. It is integral that the dialogue has legitimacy in influencing the decision.
Benefits
Stakeholder engagement provides opportunities to further align business practices with societal needs and expectations, helping to drive long-term sustainability and shareholder valueShareholder value
Shareholder value is a business term, sometimes phrased as shareholder value maximization or as the shareholder value model, which implies that the ultimate measure of a company's success is the extent to which it enriches shareholders...
.
Stakeholder engagement is intended to help the practitioners fully realise the benefits of stakeholder engagement in their organization, to compete in an increasingly complex and ever-changing business environment, while at the same time bringing about systemic change towards sustainable development.