Stakeholder engagement is the process by which an organization involves people who may be affected by the decisions it makes or can influence the implementation of its decisions. They may support or oppose the decisions, be influential in the organization or within the community in which it operates, hold relevant official positions or be affected in the long term.

Corporate social responsibility (CSR)

Stakeholder engagement is a key part of

corporate social responsibility Corporate social responsibility (CSR) is a form of international private business self-regulation which aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethicall ...

(CSR) and achieving the

triple bottom line The triple bottom line (or otherwise noted as TBL or 3BL) is an accounting framework with three parts: social, environmental (or ecological) and economic. Some organizations have adopted the TBL framework to evaluate their performance in a broader ...

. Companies engage their stakeholders in dialogue to find out what social and environmental issues matter most to them and involve stakeholders in the decision-making process. Stakeholder engagement is used by mature organizations in the private and public, especially when they want to develop understanding and agreement around solutions on complex issues and large projects. An underlying principle of stakeholder engagement is that stakeholders have the chance to influence the decision-making process. A key part of this is

multistakeholder governance Multistakeholder governance is a practice of governance that employs bringing multiple stakeholders together to participate in dialogue, decision making, and implementation of responses to jointly perceived problems. The principle behind such a st ...

. This differentiates stakeholder engagement from communications processes that seek to issue a message or influence groups to agree with a decision that is already made. Jeffery (2009) in "Stakeholder Engagement: A Roadmap to meaningful engagement" describes seven core values for the practices of gaining meaningful participation of which perhaps the three most critical are: * Stakeholders should have a say in decisions about actions that could affect their lives or essential environment for life. * Stakeholder participation includes the promise that stakeholder's contribution will influence the decision. * Stakeholder participation seeks input from participants in designing how they participate. The practitioners in stakeholder engagement are often

businesses Business is the practice of making one's living or making money by producing or buying and selling products (such as goods and services). It is also "any activity or enterprise entered into for profit." Having a business name does not separ ...

non-governmental organization A non-governmental organization (NGO) or non-governmental organisation (see spelling differences) is an organization that generally is formed independent from government. They are typically nonprofit entities, and many of them are active in ...

s (NGOs), labor organizations, trade and industry organizations, governments, and

financial institution Financial institutions, sometimes called banking institutions, are business entities that provide services as intermediaries for different types of financial monetary transactions. Broadly speaking, there are three major types of financial inst ...

Frameworks and relevant organizations

Engaging stakeholder is a requirement of the Global Reporting Initiative (GRI). The GRI is a network-based organization with a sustainability reporting framework that is widely used around the world. The International Organization for Standardization (ISO) has put forward a framework for sustainability ( ISO 26000 - ''Guidance on social responsibility'') that also requires stakeholder engagement. The Environment Council, a European organization, developed the

Principles of Authentic Engagement A principle is a proposition or value that is a guide for behavior or evaluation. In law, it is a rule that has to be or usually is to be followed. It can be desirably followed, or it can be an inevitable consequence of something, such as the law ...

. These principles are intended to provide a framework for genuine stakeholder engagement. The practitioners in stakeholder engagement are often

s (NGOs), labor organizations, trade and industry organizations, governments, and

s. In a regional planning example in England, a line graph analysis of the relationship between these stakeholders over two decades has been provided

Components

Partnerships, in the context of corporate social responsibility interactions, are people and organizations from some combination of public, business and civil constituencies who engage in common societal aims through combining their resources and competencies, sharing both risks and benefits. Agreeing on the rules of engagement is integral to the process. It is important for everyone to understand each party's role.

Buy-in Buying in may refer to: * Buying in (poker), a tournament entrance fee * Buying in (securities), a process in which a buyer whose seller fails to deliver the securities contracted for, can "buy in" the securities from a third party *Management buy ...

is essential for success in stakeholder engagement. Every party must have a stake in the process and have participating members have decision-making power. Every party must be committed to the process by ensuring action based on the decisions made through the engagement. No decisions should be already made before commencing stakeholder engagement on the issue. It is integral that the dialogue has legitimacy in influencing the decision.

Benefits

Stakeholder engagement provides opportunities to further align business practices or knowledge production with societal needs and expectations, helping to drive long-term

sustainability Specific definitions of sustainability are difficult to agree on and have varied in the literature and over time. The concept of sustainability can be used to guide decisions at the global, national, and individual levels (e.g. sustainable livi ...

and

shareholder value Shareholder value is a business term, sometimes phrased as shareholder value maximization. It became prominent during the 1980s and 1990s along with the management principle value-based management or "managing for value". Definition The term "shar ...

. Stakeholder engagement is intended to help the practitioners and their organization, to compete in an increasingly complex and ever-changing business environment, while at the same time bringing about systemic change towards sustainable development. The concept of stakeholder engagement in accounting is very important and strongly correlated with the concept of materiality. The main guidelines on the preparation of non-financial statements ( GRI Standards and IIRC Framework) underline the centrality of stakeholder involvement in this process (materiality analysis).
Stakeholder perceptions

References

External links