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.
Stakeholder engagement is a key part of corporate social responsibility (CSR) and achieving the triple bottom line. Companies engage their stakeholders in dialogue to find out what social and environmental issues matter most to them about their performance in order to improve decision-making and accountability. An engaging stakeholder is a requirement of the Global Reporting Initiative, a network-based organization with sustainability reporting framework that is widely used around the world. The International Organisation for Standardization (ISO) requires stakeholder engagement for all their new standards.
Involving stakeholders in decision-making processes is not confined to corporate social responsibility (CSR) processes. It's a tool used by mature private and public sector organizations, especially when they want to develop understanding and agrees to solutions on complex issues or issues of concern.
An underlying principle of stakeholder engagement is that stakeholders have the chance to influence the decision-making process. 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. The UK organization The Environment Council developed the Principles of Authentic Engagement. These are intended to provide a framework for genuine stakeholder engagement.
Jeffrey (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, non-governmental organizations (NGOs), labor organizations, trade and industry organizations, governments, and financial institutions.
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 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.
Stakeholder engagement is intended to help the practitioners fully realise the benefits of stakeholder engagement in 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.
- Jeffery, Neil (2009). "Stakeholder Engagement: A Road Map to Meaningful Engagement" (PDF). The Doughty Centre for Corporate Responsibility, Cranfield School of Management. Retrieved 23 April 2015.
- http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/p_StakeholderEngagement_Full/$FILE/IFC_StakeholderEngagement.pdf Archived January 24, 2009, at the Wayback Machine