@GRIAusConf_A strategic approach to stakeholder engagment - Dr Leeora Black
A strategic approachto stakeholderengagement.Dr Leeora Black, Managing Director, Australia Centre froCorporate Social ResponsibilityRichard Lambell, Senior Consultant, ACCSRBrought to you by
- MASTER CLASS – A STRATEGIC APPROACH TO STAKEHOLDER ENGAGEMENT Presented by Dr Leeora BlackManaging Director, Australian Centre for Corporate Social Responsibility The Australian GRI Conference on Sustainability and Integrated Reporting 26 March 2012
YOUR BIG QUESTION• What is the ONE big question you have now about stakeholder engagement practices in your organisation/daily work?
WHAT WE WILL COVEROne big idea• When it comes to stakeholders, managers are short- sighted• Managers need a 360-degree view of the stakeholder terrain if stakeholder engagement is to improve reporting, strategy and organisational performance
CHANGING ORIENTATION TOWARDS STAKEHOLDERS Maximise Social, Environmental & Economic Value Engage (Sustainability) Respond Enhance Reputation Avoid Harm ComplySource: Adapted from David Wheeler, Shulich School of Business, York University
TRENDS IN STAKEHOLDER RELATIONS –HOW TO ENGAGE From To•Bilateral and transactional • Longer term multilateral relationships. relationships•Engaging around • Engaging around organisational issues. organisational and societal issues.•Tactical and reactive. • Proactive and•Emphasis on risk collaborative. mitigation and reputation. • Emphasis on learning, innovation and mutual value creation.
STAKEHOLDER VIEW - TRADITIONAL Unions Customers Employees YOU Communities Regulators NGOs Suppliers
NEW VIEW Source: ACCSR. Report on the Stakeholder Survey for the NSW Minerals Council. April 2011
DEFINITION OF A STAKEHOLDER Individuals, groups or networks who can affect or are affected by, an organisation.
DEFINITIONS: STAKEHOLDER“Can affect or be affected by ...” Impacts and issuesIssues arise in response to a perceived gap between expectationand realityStakeholders get organised around issues..... Stakeholderscome in packages called issues!Issues flow through networks
COMMON MISTAKES AND BLIND SPOTS• Managers tend to focus on corporate-centric issues rather than pubic issues• Managers tend to conflate what is important to the company with what is important to stakeholders.... And create blind spotsfor themselves and the company
THE STRATEGIC LIMITATIONSOF CHECKLISTS Examples of checklists: • Lists of stakeholders for and against project • Lists of issues that need immediate attention or not Dynamic interactions are ignored • Interactions of issues and stakeholders are ignored • The role of ‘Bridging stakeholders’ is overlooked
PUBLIC ISSUESTo engage effectively on public issues, we needHigh quality stakeholder relationshipsANDMotivation to collaborate
WHY RELATIONSHIPS MATTER High quality stakeholder relationships are the key to creating positive social impacts Relationship Social Impacts Leverage for change is in the relationship side of cycle High quality relationships produce more social capital and are a foundation for social license to operate
WHAT IS SOCIAL CAPITAL? “... the stock of active connections among people: the trust, m utual understanding and shared values and behaviors that bind the members of human networks and communities and make cooperative action possible.” Cohen and Prusak, 2000
SOCIAL CAPITAL ANDSOCIAL LICENSE TO OPERATE Trust Economic Openness (Listening & (Benefits me) promise- keeping) Information Socio-political quality & (Benefits the quantity Motivation to region) collaborate Respect for Believable people & Shared goals norms for the future (Consistent & fair) Honest, transparent Social Capital Legitimacy communication Building blocks of social license to operate
MODEL OF SOCIAL LICENSE TO OPERATE Psychological identification - The community has very high trust in the industry and sees itself as sharing responsibility for the company’s success. Stakeholders will advocate for the company when necessary. Approval – The industry has established both legitimacy and credibility, and the community approves of the industry. Acceptance - The community listens to the industry and considers its proposals. If, by their own standards, they have no reason to doubt the industry’s credibility, they may allow a project to tentatively proceed. Withholding/withdrawal - The rejection level of a social licence is the worst case scenario. This can manifest in complaints, blockades and public action against individual sites, companies or the industry as a whole.
HIGH SOCIAL LICENSE TO OPERATE→ LOW SOCIO-POLITICAL RISK Level of Socio-Social license Political Symptoms Risk Withheld/ High Shutdowns, blockades, boycotts, Withdrawn violence/sabotage, legal challenges Acceptance/ Medium Lingering/recurring issues & threats, outside Tolerance NGOs, watchful monitoring Approval/ Low Company seen as good neighbour, Pride in Support collaborative achievements Psychological Very low Political unity against critics, sense of shared identification future, co-management
STAKEHOLDER PLANNING MATRIXStakeholders motivation to collaborate with company High Low SLO/High High SLO/High Motivation to Motivation to Collaborate: Collaborate: FRUSTRATED READY FOR COLLABORATORS COLLABORATION Medium Low SLO/Low High SLO/Low Motivation to Motivation to Collaborate: Collaborate: UNLIKELY TO FRIENDLY BUT COLLABORATE INDIFFERENT Low Low Medium High Level of social license (SLO) in relationships between company and stakeholders
PITFALLS TO AVOID• Inadequate investment in relationship-building• Selective engagement• Failing to deliver on promises• Failing to understand internal structure of the community• Failing to listen and respect with over-reliance on legal permits• Failing to maintain close contact when there are changes of personnel in the company• Over-estimating the quality of the relationship
KEY TAKEOUTS• Understanding the quality of relations within the stakeholder network can give you:• Insights for managing issues• Insights for strategy• And is the foundation for earning, maintaining and strengthening your social license to operate.
THANK YOUGood Luckfirstname.lastname@example.orgVisit the ACCSR table during the conference!Meet ACCSR people at the conference!