The Importance of Stakeholder Engagement for Board Directors and Stakeholder Engagement
Directors are accountable for the overall management of a company and have the obligation of acting in the best interest of shareholders. Boards must also take into account the concerns and requirements of all stakeholders, including employees as well as suppliers and customers as in addition to investors, communities and other stakeholders. This approach is called stakeholder management and is one of the fundamental principles that are the basis of the ESG (environmental social and governance) movement which is revolutionizing the way companies are managed across the world.
A board of directors is a group that works together to accomplish the objectives of an organisation. It doesn’t matter if it’s setting the strategy, providing guidance and guidance to management or ensuring that the business is in line with its mission and vision A well-functioning board is essential to the success of a company.
A well-run board will seek out different perspectives to better understand the unique issues that the company has to face. They should also be able provide clear channels of communication between board members and stakeholders. This is not just an important aspect of corporate governance, but is also essential to build trust between the board and the stakeholders. Stakeholders are more likely to work with companies who are transparent and open with their reporting, because it demonstrates that the board committed to its responsibilities. It will also help to build an image for the business, and increase its long-term value.