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Context: Stakeholders and the Social Licence to OperateA company's traditional stakeholders include shareholders, regulators and those with legally protected interests like labour and its representation. Many companies have in recent years been opening up to talk to groups beyond their "traditional stakeholders". Why? Because today, economic success is not only driven by scientific findings and technological feasibility but is increasingly dependent on a 'social license to operate': society's approval of what a company is doing.The growing number of publications in this area (studies, manuals, tool books, etc) indicates the increased attention to matters of stakeholder engagement. More than ever, companies operate within a complex environment of various stakeholders: legislators, business associations, pressure groups, special interest groups and others - and the networks of relationships between them. This complex landscape of stakeholders is dynamic; as issues are developing, attention is shifting and coalitions are being built and abandoned. Companies and trade associations strive to understand how these dynamics might impact their own positions, operations and future strategies. They need to be able to identify potential pressures (risks) as well as potential allies (opportunities) among their stakeholders. Engaging with representatives of interests outside the businessworld can actually protect and sustain the success of a company. In fact, it is most important in protecting the entrepreneurial freedom to manoeuvre. However, the decision about why, when and with whom to engage is not a trivial one. Today, stakeholders of any kind – financial, political, governmental or NGO – have their own clear agenda, are well informed and are prepared to challenge any answer. |
The current debate about Corporate Governance is partly about integrating an understanding
of the wider stakeholder universe into corporate management. Good Corporate
Citizenship or Good Corporate Governance, whether factual or perceived,
determines if a company enjoys an above average degree of trust. How the term 'Corporate
Governance' developed in a very short time span is a case in point. It started as
a mechanism for protecting shareholder rights from over powerful and badly controlled
management. It has now evolved into requirements for transparency, accountability,
responsibility, compensation and, last but not least, an explicit reference to ethical
behaviour and the "role and rights of stakeholders established by law or through
mutual agreement" (OECD Principles of Corporate Governance, 2004, p21). Responsible company boards are nowadays expected to anticipate the evolving capacity of stakeholders to ask very precise questions and challenge corporate behaviour. While many stakeholders are still unknown to companies, their 'roles and rights' are developing, due to new legislation, peer pressure and public mobilization. Possible impacts of (often unmet) expectations have been demonstrated in different sectors over recent years. |
