Communication and engagement beyond shareholders
It appears it’s not just investors that are of interest to a large majority of companies. Overall, three quarters of respondents say their company seeks information on the needs of stakeholders other than shareholders. This is reportedly the case among 86 percent of respondents at mid-caps, followed by 77 percent of those at mega-cap companies, 75 percent of those at large-cap firms and 66 percent of those at small caps. There is minimal regional variation.
Globally, company outreach to stakeholder associations/organizations is the most common method used when seeking information on the needs of stakeholders other than shareholders, cited by 75 percent of respondents. This is followed in frequency by market research (cited by 51 percent of respondents), impact assessments (50 percent), social media and the internet (43 percent) and holding open meetings (24 percent).
Almost nine in 10 respondents at mega-caps (88 percent) say their company conducts outreach to stakeholder groups, compared with 76 percent of those at large caps, 71 percent of those at small caps and 63 percent of those at mid-caps. Similarly, larger companies with more resources at their disposal are more likely to conduct impact assessments: 62 percent and 65 percent of respondents at large-cap and mega-cap companies, respectively, report doing so. Just a third of those at small caps and 42 percent of those mid-caps report doing the same.
More than three quarters (76 percent) of respondents at mega-caps say their firm uses social media or the internet to research the needs of non-shareholder stakeholders. This compares with around a third or less of respondents at smaller companies.
Impact assessments appear to be far more popular in Europe, where 81 percent of respondents report their company using them, while just 38 percent of those in North America say likewise.
Respondents in Europe are also more likely (52 percent) to report using social media/the internet than their peers in North America (33 percent). Those in North America are slightly more likely (75 percent) to say their firm reaches out to stakeholder groups than are those in Europe (71 percent).
Although information gleaned from engagement with various stakeholder groups can be passed along to the board, there is arguably no full alternative to having directors take part in that process and thereby gain first-hand understanding of those groups’ needs, wants and concerns.
Respondents most frequently cite shareholders (65 percent) when asked which stakeholder groups members of their board engage with. But a majority (58 percent) of respondents also say members of their board engage with employees and 41 percent say directors are involved in engagement with customers. Beyond that, almost three in 10 respondents (29 percent) report directors engaging with communities and 21 percent say directors engage with suppliers.
There is broad consistency in these results across respondents at companies of different sizes. That said, 45 percent of those at mega-cap companies say members of their board are involved in engagement with communities. This compares with 32 percent of respondents at mid-cap companies, 25 percent of those at large caps and 19 percent of those at small-cap firms who say the same.
Similarly, almost a third (32 percent) of respondents at mega-caps say their directors engage with suppliers, more than those who say so at mid-caps (23 percent), large caps (18 percent) or small-cap firms (16 percent).
There are relatively narrow differences between respondents in Europe and North America in terms of board engagement with non-shareholder groups. That said, however, 75 percent of those in Europe report that members of their board engage with shareholders, compared with just 58 percent of those in North America.
CommentsRespondents were asked how information on the needs of stakeholders other than shareholders is shared with the board. Their comments include:
