Thinking of Others

Being superficial. It’s not a matter of simply coming up with a list of sweeping categories and calling them “stakeholders”. Customers, employees, suppliers and the community are all far too diverse groups to just be lumped together under generic headings. If you’re going to do anything useful when thinking about stakeholders, you need a meaningful breakdown.

Assuming that all directors see the relative importance equally. Depending on their experience – and what they’ve seen in other organisations – they may have insights that shift the emphasis or the risk assessment. And don’t forget that some stakeholders might seem to have little “positive” value to the company but can still threaten huge downside to the company’s – and its board’s – reputations.

Spending most of the board time talking about historical financial and operational performance (with a bit of forward looking review thrown in when the budget or an announcement is due). Board agendas encourage this – and often management feel more comfortable covering what has happened or what they have been doing. Instead, they should be encouraged to share their views on how core influences and influencers might be reacting or thinking.

Thinking stakeholder-related data are “too operational” for a board, or not making the effort to present data that are not readily quantifiable. If such information is presented in a strategic, forward looking way, with analysis and narrative, the Board will be interested and see its relevance. Often it will provide a good basis for a lively board discussion.

Thinking that it’s an optional extra, or that it’s enough to put ticks in the boxes with superficial analysis. Board risk analysis that’s content-free boilerplate or blandly high level, and with no convincing discussion of how any risks will be addressed, is of little use to anyone (but remains surprisingly popular nonetheless).

Thinking in a 20th century mindset about ways to “hear the employee voice”. Most directors tell us they find things out by getting out and about. How can technology be used to build on this by bringing the workforce view into the boardroom? Maybe it’s a quick video of a journalist interviewing some staff or conducting a focus group? Or a snap poll on a employee hot topic? This sort of thing, used judiciously, can produce a much better board discussion than a dry paper.

Not using site visits to the full and interacting only with top managers. How about the Board “dropping in” on a few people during a designated part of the visit: what suppler issues are front of mind for the manager of the production line? What is the store manager hearing from customers this week? And what about hearing from customers or suppliers first hand? (Don’t like these ideas? Use your imagination to come up with ones that are better for your board.)

Management thinking it through for the Corporate Social Responsibility (CSR) report – but that being as far as it goes. Rarely do CSR Reports gets discussed in any meaningful way at board level. And, for many, the stakeholder relationships and responsibilities tend to stay on those pages as far as boardroom discussion goes. Yes, safety (in particular) and environment (less so) do reach the agenda – but what about all the other aspects? If the Board’s not giving those much attention, how can they be sure management is?

Sitting in the boardroom (or executive office) thinking that you know what people in the community are thinking or how they are being impacted. Given the age, gender and ethnic profile of most boards, you probably don’t. And remember that “contributing to the community” through volunteering initiatives is not at all the same as “listening to the community”.