The latest survey of the Governance and Compliance/Core
The Government's recent Green Paper on corporate governance
reform voiced concerns that some boards may be paying too little
attention to the impact of their actions on their stakeholders.
We decided to survey the Governance and Compliance/Core
community about the issue and asked whether their boards actively
considered the views of their wider stakeholder base. There was a
generally positive response to the question, with 73% saying they
do consider stakeholders' views, while 11% answered
'no' and 16% 'maybe'.
'The board considers the views of management through a
management committee structure in relation to a range of matters,
including strategy and commercial issues,' one person noted.
'The views of the wider stakeholder population are taken into
account for a narrower range of decisions.'
Another person qualified the amount of stakeholder consideration
offered saying: 'It's more so for the big decisions. I
think perhaps with the less high-profile work there is a tendency
to overlook some stakeholder groups.'
However, one respondent was unconvinced that his organisation
was genuine in its stakeholder concern. He said: 'I feel that
it's done with a view to satisfying regulatory requirements,
for instance, conduct risk, rather than a genuine desire to include
We then asked how our community's companies captured wider
stakeholder views. Responses showed a considerable degree of
uniformity, with a familiar list of methods for gathering
information and views: regular engagement surveys, feedback, focus
groups, networking and executive management updates.
However, there were some more colourful responses including one
person who when asked how views were captured replied:
'Inadequately. Stakeholder views appear to be limited to those
who are accessible in the City only, hence institutional
shareholders, lenders and senior managers are heard to the
exclusion of others.' Another was similarly disillusioned
saying: 'As with many companies there is a great deal of
"communication" with employees initiatives of diversity
and inclusion and employee forums, but ultimately it always looks
like ticking a box with no material differences in how employees
are treated. Customer focus is driven by regulatory
But not everyone was so downbeat. On person said: 'It's
all about culture. The directors empower the employees to speak up
when something isn't working, provided that the employee in
question is willing to be challenged on the point in
We also asked how companies could better improve their
stakeholder engagement. 'Directors need to spend more time in
the business and speaking with stakeholders in the communities that
the business works in,' said one. Another added: 'A
comprehensive stakeholder engagement strategy is essential. This
should include responsibility for the different types of, or
individual, stakeholders, allocated to executive directors, with
pairings with non-executive directors where appropriate.'
There were other opinions. One respondent said: 'Making
companies and their advisors believe the need to better comply with
section 172 of the Companies Act, which frankly is widely
Yet another person believes 'in the value of PR. The more
people are aware of what you are doing, the more questions they
will ask, and the more interested they will be. In turn, this will
help drive improvements as the company strives to get better and
Finally, one person said better engagement could be achieved by
'putting employees higher up the list of priorities. If they
are onside it will help with other stakeholder engagement.'
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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