1. The ideal profile and mandate of a CSRO
23The Corporate Report
The ideal profile and mandate of a CSRO
by Martin Humphries
The appointment of a Chief Stakeholder Relations Officer (CSRO) forms part of
this fundamental shift in leadership thinking.
Background
Stakeholder relations and integrated thinking, leading
to the outcome of an Integrated Report (IR), represent
a fundamental shift in the way that companies
strategically steer and manage themselves. Applied
correctly, stakeholder relations and integrated
thinking present a significant opportunity for an
organisation to generate sustainable competitive and
strategic advantage.
The appointment of a Chief Stakeholder Relations
Officer (CSRO) forms part of this fundamental shift in
leadership thinking. If such a person is not appointed,
it will fall to management to deal with ongoing
communicationwithstrategicstakeholderstoestablish
the legitimate needs, interests and expectations
(NIEs) of the company, in which case the operational
impact on management and management’s time must
be considered. If the organisation is to benefit from
this new thinking and ultimately reap the potential
rewards, it becomes imperative that a great deal of
thought must go into framing the correct profile
of a CSRO and, subsequently, the mandate that the
appointed CSRO will be given.
Direction of communication
The term ‘stakeholder relations’ is not to be confused
with public relations, investor relations or other
similar communication-related designations. Such
designations typically and historically describe pre-
dominantly outward-bound communications, ie
telling investors and other ‘stakeholders’ what the
organisation wants them to hear, what the organisa-
tion would prefer them to hear, or what the organisa-
tion thinks they want to hear.
In contrast, modern ‘stakeholder relations’ focus on
interactive, ongoing strategic communications, as
follows:
• Inward-bound communications, ie new and
sometimes provocative perspectives from the
outside world, are brought into the organisation.
Spearheaded by the CSRO, these perspectives
are then analysed by management and ultimately
converted into relevant and appropriate action
plans. It enables management to manage on a more
informed basis.
• The Integrated Report, a 15- to 30-page document
in clear and understandable language, replaces
the traditional, backward-looking Annual Report.
In the IR, the board of the organisation must be
able to show that it has indeed applied its collec-
tive mind in identifying the social, environmental,
economic and financial issues that impact on the
company’s business, and whether these issues have
been embedded into long-term strategy. From the
IR, the reader must be able to make an informed
assessment that the company will sustain value
creation in the changing world in which it operates.
Benefits of a CSRO to the organisation
The benefits of a correctly profiled and mandated
CSRO to a company will primarily be in the infor-
mation that the CSRO brings into the company. This
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2. 24 The Corporate Report
The ideal profile and mandate of a CSRO
information will assist the executive management
team to:
• improve strategic decision making, improve organ-
isational performance and enhance organisational
reputation among all stakeholders
• assess the ability of the organisation to create and
sustain value over the short, medium and long term
• consider business opportunities and/or risks that
were previously not identified, prioritised or fully
understood
• continually assess and re-evaluate the business
model of the organisation in order to ensure its
sustainability and competitiveness
• continually challenge itself, particularly with
reference to the way the directors and executives
act and organise themselves
• consider whether or not the company’s governing
structure has sufficiently applied its collective mind
in identifying the social, environmental, financial,
human, manufactured and intellectual capital
aspects that impact on the company’s business,
and whether these issues have been appropriately
embedded into strategy as critical interdependencies
• assess the efficacy of all of the organisation’s various
line functions, policies, procedures, etc from the
perspective of all external stakeholders.
Risks for the organisation
I am not addressing the risks for the organisation
of not pursuing the spirit and intent of integrated
reporting and stakeholder relations. Those risks
will become clear to the organisation’s leadership
when, several years down the line, they see new
and existing competitors (who had embraced the
process) enjoying the rewards of greater stakeholder
engagement and support. To quote sporting goods
company Nike – ‘will you lead, follow fast or risk
extinction?’.
The risks of not correctly profiling and/or mandating
the CSRO are that it will merely provide a ‘warm,
fuzzy feeling’ but there will be limited if any business
value-add.
A CSRO with the wrong profile, or a profile that is
too weak or too specialised, will probably be unable
to provide meaningful, strategic information or
information that is truly representative of ‘integrated
thinking’. This outcome will apply even if the CSRO is
given a broad mandate.
On the other hand, by appointing a CSRO with a very
strong profile, the company runs the risk of the CSRO
becoming frustrated unless they are given a broad
external mandate AND open lines of communication
within the company itself.
Ideal profile of a CSRO
The CSRO should ideally be someone who is:
• capable of ‘integrated thinking’, an ‘out of the box’
thinker and a good listener
• seen as impartial
• able to question and challenge the status quo, and
be provocative
• an intrapreneur, ie someone who acts and behaves
like an entrepreneur, but within the context of a
larger organisation
• experienced in working outside and inside of the
corporate world
• able to ask the right questions and present new and
fresh thinking
• able to quickly understand business value proposi-
tions and interdependencies
• have the intelligence and ‘savvy’ to understand and
manage both internal and external politics
• be able to identify and deal with vested interests
The risks of not correctly profiling and/or mandating the
CSRO are that it will merely provide a ‘warm, fuzzy feeling’
but there will be limited if any business value-add.
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3. The ideal profile and mandate of a CSRO
25The Corporate Report
• able to address sustainability issues in the context
of value creation
• able to understand the confluence of financial
reporting, sustainability, business value, value
reporting and integrated reporting
• experienced in a multitude of executive functions,
preferably someone who has been a CEO in the
past
• highly professional with a strong ‘boardroom
presence’
• able to consider the possibility and impact of
‘black swans’ and other potential stakeholders
that have not traditionally been contemplated by
management (the theory of black swan events is
a metaphor that encapsulates the concept that the
event is a surprise – to the observer – and has a
major impact; after the fact, the event is rational-
ised by hindsight)
• able to communicate across all levels of an
organisation (eg in a transport logistics company
that has been identified as a key stakeholder
of a manufacturing company, the CSRO of the
manufacturing company needs to be able to develop
relations and communicate with anyone within the
transport company, from the CEO to the drivers,
and anyone in between)
• able to fully understand and interact through all
forms of social networking (the CSRO and the
organisation itself will ignore these platforms at
their peril)
• academically qualified, preferably with a combina-
tion of two or more disciplines (the combination of
a technical and a commercial qualification is par-
ticularly strong and flexible)
• South African, with strong exposure to doing
business internationally
• a networker who enjoys socialising
• able to speak at least two major languages.
The value of a strong IQ and EQ must be emphasised,
ie the CSRO must:
• be flexible, adaptable, comfortable with ambiguity
and pro-active
• have interpersonal awareness, intrinsic motivation
and integrity
• focus on the empowerment of self and others, rela-
tionship management and human development
• be resilient
• be team-oriented and a team player, without a big
ego
• be results-oriented.
Finally, the ideal CSRO will be between the ages
of 40–45 and 60–65, perhaps older. Experience
and maturity in the broader world of business are
more important than academic qualifications, with
experience across a broad range of business sectors
as opposed to expertise in a limited sector being
preferable. However, age is less relevant than a sense of
maturity, with the right candidate being chosen as the
most appropriate fit for the majority of the company’s
stakeholders.
Ideal position in the organisation
Regarding the CSRO’s position in the organisational
hierarchy, the following points are important:
• The CSRO’s line reporting should be to the CEO.
• The CSRO should be perceived as an integral
part of the C-suite, but with no operational roles/
responsibilities.
• The CSRO should be a neutral insider/outsider who
is able to form open and collaborative relationships
with all stakeholders and then provide relevant,
meaningful feedback to the C-suite.
• Regarding the Integrated Report, the CSRO must
provide critical inputs to the IR. He or she is not
responsible for drafting or preparing the report, but
should provide inputs across all categories and be
involved in the final approval of the IR.
Experience and maturity in the broader world of business
are more important than academic qualifications
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4. 26 The Corporate Report
The ideal profile and mandate of a CSRO
• It is imperative that the CSRO is not constrained or
influenced by organisational politics, be it histori-
cal or current in nature. Similarly, the CSRO should
not be influenced by or biased towards a particular
function or department within the organisation,
particularly one for which they previously held
executive responsibility.
This means the CSRO should have an exception-
ally solid understanding of the various roles and
value-adds that each function within an organisa-
tion can bring, ie they should be able to under-
stand that finance, production, marketing, human
capital, technology, logistics, etc all have an equally
important role in the organisation and that any one
function does not necessarily dominate another.
It is for no less than these reasons that I feel that
the CSRO should preferably be a new external
appointment, someone who will not be bound,
influenced or prejudiced (positively or negatively)
by historical events and relationships.
• Regarding the argument that an internal appoint-
ment has the benefit of already understanding the
business of the organisation, I believe that a new
CSRO with the correct profile will be able to very
quickly gain an understanding of the business
and its value drivers and that the investment in a
proper ‘on-boarding’ programme for a new CSRO
will reap benefits faster in the medium to long term
compared to a candidate appointed from within.
• The tenure of a particular CSRO within a business
would ideally be approximately five years, by which
time some new perspectives/thinking in the CSRO’s
office would be very beneficial to the company.
Ideal mandate for the CSRO
The CSRO should be given a broad and open mandate
so that they are able to:
• gain a clear understanding of the purpose of the
organisation, and in this regard continually inter-
rogate all stakeholders and the leadership of the
organisation itself
• gain a clear understanding of the various drivers of
business value and their often changing nature and
priorities
• gain a clear understanding of the strategic stake-
holders of the organisation and their respective and
prioritised NIEs.
• build meaningful, interactive relationships with all
stakeholders
• communicate with and address the NIEs of stake-
holders in as transparent a manner as possible
• identify and liaise with stakeholder’s stakeholders
• feed back information and findings, on an ongoing
basis, to the leadership of the organisation
• develop plans of action, together with the organ-
isational leadership, that will address the identi-
fied NIE of stakeholders (however, converting the
agreed plans into action, within agreed timeframes,
remains the responsibility of the traditional leader-
ship and line management of the organisation)
• provide key guidance and inputs into the Integrated
Report
• provide key inputs into scenario planning and
strategy sessions
• provide key inputs and guidance into the organisa-
tion’s ‘transparency management’ initiatives.
All the above follow from intensive sessions about
CSROs between Prof Mervyn King, several well-
known listed companies and me on behalf of EGN.
Martin Humphries
Martin Humphries is the founder and
chairman of Executives’ Global Network
(South Africa), an independent thought
leadership organisation for C-suite Executives.
Martin is the deputy chair of a CSRO Peer
Group, chaired by Prof Mervyn King. Similarly,
Martin co-chairs several discussion groups for CEOs, CFOs,
CIOs, CHROs, CMOs, a Mining Forum, and a Forum for
Business Development in Africa.
He has 20 years of strategic and operational experience as a
businessman, entrepreneur and CEO. During this time he has
been involved in takeovers, rescues, MBIs, commercialisation
of intellectual capital and the raising of financial capital.
Martin has previously served as a director of numerous
privately held companies as well as two JSE-listed entities. He
has travelled extensively and has international experience,
particularly in Africa, Europe and the USA.
Martin holds a Higher National Diploma in Mechanical
Engineering from Wits Technikon and a BCom from Unisa.
Author
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