Does your board know how to engage well with stakeholders and report on this important activity?
As many companies know, the UK has a long tradition of having a corporate governance code which includes detailed guidelines on how the board should engage with and report on involvement with stakeholders.
More and more countries are following suit. Boards of Danish listed companies, for example, are expected to listen to and include various stakeholders in their work, as well as to explain how they do this (Danish Corporate Governance recommendations 1.1.1. and 1.1.2). In Norway, the code includes a section stating that “the company should have guidelines for how it integrates considerations related to its stakeholders into its value creation”, and the board is expected to evaluate these guidelines.
If your board is searching for inspiration on how to involve stakeholders as well as report on stakeholder engagement, the UK code can be helpful. You can find it here: https://www.frc.org.uk/directors/corporate-governance-and-stewardship/uk-corporate-governance-code
One very good example of these guidelines in action comes from Taylor Wimpey’s 2021 Annual Report (pages 37-47). https://www.taylorwimpey.co.uk/corporate/investors/2021-annual-report
This company won the 2022 “stakeholder disclosure” of the year award in the UK for their excellent reporting, which included a full page dedicated to each stakeholder group (Customers, Employees, Partners, Investors, Communities) as well as examples of how stakeholders were considered in specific decisions, such as CEO succession.
For specifics on each stakeholder group, see the following pages in the report:
“Our Customers” p 38-39
“Our Employees” p 40-41
“Our Partners” p 42-43
“Our Investors” p 44-45
“Our Communities” p 46-47
Another excellent reporting example is to be found in the Annual Report of IMI Plc, pages 55-57
We hope these examples help you get a good start on improving your stakeholder engagement and reporting.
If you’d like further assistance, feel free to contact us at reception@LeadershipAdvisorGroup.com.