Stakeholder Engagement for Effective Management and Reporting

If effective management and reporting are about minimising negative and maximising positive environmental and social impacts, then stakeholder engagement is one of the core skills and key activities which enable this to happen successfully and effectively. Organisations can no longer choose if they want to engage with stakeholders or not; the only decision they need to take is when and how successfully to engage. When organisations don’t engage stakeholders successfully, they can lose out, with subsequent negative impacts.

Stakeholder engagement is relevant to any type of organisation: business, public or civil society. It is particularly important in the context of running an organisation responsibly and is integral to the concept of corporate responsibility, good governance and transparent reporting.

Principle 16 in the King IV Report on Corporate Governance for South Africa highlights the importance of stakeholder engagement: In the execution of its governance role and responsibilities, the governing body should adopt a stakeholder-inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of the organisation over time. Stakeholder relations is also one of the six capitals addressed in integrated reporting.

Engaging with stakeholders in a structured and well-managed way enables a proactive cultivation of relationships that can serve as a valuable capital during challenging times. Stakeholder engagement should be driven by a well-defined strategy and have a clear set of objectives which are in line with an organisation’s operational strategy and business plan.