The next few months will see boards of large businesses talking pretty hard about how well they engage with stakeholders.
In June, the Financial Reporting Council (FRC) will publish a new version of the UK Corporate Governance Code – yesterday was the deadline for responses to 31 questions posed to businesses and the public as part of the FRC’s consultation document.
The three core aims of the revised Code are to boost long-termism and sustainability within business, shore up public trust in business, and ensuring the UK capital market is attractive to global investors through Brexit and beyond.
Of course, being human, most executives want to hear about how the Code might affect them on a daily basis, and the coverage of this looming revision has accordingly focused on lock-in periods for bonuses paid via shares, executive pay, more reporting on company culture and diversity, and – controversially – extended the company’s core purposes to include its contribution to society at large, of equal importance as generating value for shareholders.
Less discussed has been the proposal to require large companies (both private and listed) to engage closely with all their key stakeholders. The Government intends to legislate on this subject, and invited the FRC to include this duty in the new Corporate Governance Code.
Who are your key stakeholders, apart from your shareholders? Definitely on your list will be your workforce… perhaps you have added your customers as well. But you might have missed some other potential stakeholders: suppliers; lenders and bondholders; non-governmental organisations; in some sectors, regulators; and what about the communities surrounding each of your business’ operations?
Currently, the Government and the FRC propose three potential structures that could allow workforce concerns to be brought to the board: appoint a director from the workforce; an advisory workers’ council; or a designated non-executive director. Such arrangements to create an effective ‘voice’ in the boardroom may apply for other groups of key stakeholders.
However, part of compliance will involve demonstrating the concrete steps you took to address stakeholder concerns, and clear evidence that you successfully communicated these steps back to the affected stakeholders. In other words, this will not be a ‘box-ticking’ exercise, and both the new Code and the anticipated legislation will require evidence of effective two-way engagement.
This may sound like a pain, but it actually makes a lot of business sense. If your customers are unhappy with a product, or your local community resents some of things you do, you want to know long before sales begin to fall or a group of disgruntled local residents start protesting outside your front office.
So, how do you create these valuable communications? Not by sticking a management memo up in the canteen, or issuing a press release so dull that even your local newspaper doesn’t bother to report it.
ICSA, the Governance Institute, published some very useful suggestions on page 30 of its report, The Stakeholder Voice in Board Decision Making. Some stakeholder groups, such as the workforce, can be properly heard via face-to-face meetings; other stakeholders such as customers can be engaged with via surveys and websites. However, for your outbound reporting and feedback communications with each group of stakeholders, you need to put together content that is about humans, tailored to appeal to the audience, and looks great.
This requires expert story-telling, whether it be distributed via newsletters, intranets, video, blogs, social media, dedicated microsites, magazines… but whichever routes you choose, the content must be compelling and very engaging. And that’s hard to do.
We can help you with this. Invicomm has worked with more than 100 business clients – large and small, global brands and niche businesses – writing and designing great messages that deliver the goods without breaking the bank. Contact us today, and we’ll tell you what we could do for you in your mission to engage with your stakeholders.