By Juliet Etefe

Copyright thebftonline

By Bernard BEMPONG

Generally, a stakeholder is any individual or a group that has an interest in an activity, a decision, business, or a policy. A stakeholder can influence a project and are often affected by its outcomes, making their involvement essential.

A company’s stakeholders usually include its shareholders employees, customers, suppliers, government agencies, a pressure group or the communities where it operates. That said, stakeholder engagement refers to a strategic interaction between a company and its stakeholders to ensure that their common interests are considered in the company’s major decisions.

Strategies for Effective Stakeholder Engagement

A stakeholder engagement strategy is a structured plan for identifying, creating dialogue and monitoring both internal and external stakeholders. In today’s dynamic business environment, effective stakeholder engagement is essential for maximising its impact and ensuring long-term sustainability.

A company can build a strong social capital, mitigate social risk and create shared value through an effective shareholder engagement strategy. Effective engagement depends on using the right strategy to foster a mutual understanding and collaboration between stakeholders. A well-designed stakeholder engagement strategy goes through the process of:

Step 1: Identifying Stakeholders

One of the most crucial steps in stakeholder engagement is identifying key stakeholders by their importance, interest and potential impact. Stakeholders can be identified and categorised as internal or external, and further as primary or secondary. Primary stakeholders are directly affected by a company’s actions.

These could include customers, employees, shareholders and suppliers. Secondary stakeholders are indirectly affected. They may include the media, NGOs and local communities. Secondary stakeholders may offer support or pose resistance. Categorisation of a stakeholder as either primary or secondary may vary depending on the nature of their interest, influence or decision at stake. It is important to create a comprehensive list of internal and external stakeholders.

Step 2: Mapping and Analysing Stakeholders

Stakeholder analysis is a strategic tool used to understand a stakeholder’s interest, influence and inter-connections. While one or a few individuals can lead stakeholder mapping and analysis strategy, it should be a collaborative and inclusive process to ensure a more complete and accurate picture of a stakeholder. Mapping and analysis must help to determine how best to actively engage with a stakeholder.

Influence/Interest Matrix

It is essential to prioritise stakeholders based on power, legitimacy and urgency. The reason is that stakeholders wield different level of influence. Influence/Interest Matrix or Power/Interest Matrix) can be used to assess a stakeholder’s legitimacy, access to resources, network influence and sector alignment. Stakeholders with high influence and high interest usually receive the most attention. The matrix categorises stakeholders into four main groups:

High Interest, High Influence: Act as partners or collaborators. This group must be directly involved in key decisions and planning.
High Interest, Low Influence: They must be consulted for insights. Empowering them can improve engagement and support.
Low Interest, Low Influence: Require basic information and updates. This group should be monitored to prevent unexpected disruptions
Low Interest, High Influence: Must be kept satisfied and informed. Their disengagement could pose a risk to project success.

Through the process of identifying, analysing and prioritising a stakeholder, businesses can foster stronger relationships, align interests and create mutual value.

Step 3: Engaging Stakeholders

Effective engagement requires strategic planning and thoughtful execution to achieve its impact. This stage begins by clearly defining the purpose and objective of the engagement bearing in mind the stakeholder, their influence and interest.

Public vs. Private Stakeholder Engagement

Stakeholder engagement methods can differ significantly between the public and private sectors. Public sector organisations often deal with a wider range of stakeholders including elected officials and the public. In contrast, private businesses usually engage a narrower audience especially their customers and shareholders. In the public sector, their primary focus is on transparency, accountability and public welfare. In the private sector, engagement is typically more targeted. The objective often centres on profitability, innovation and market growth. Regardless of the sector, stakeholder engagement must help to improve policies and build a stronger relationship.

b) Executing the Engagement Plan

This phase involves putting the engagement plan into action. Successful execution largely depends on sufficient resources in respect of time, budget or staff.

Preparing a Communication Plan

A comprehensive communication plan is essential to keep stakeholders informed, heard and involved. Preparing an effective communication plan involves:

Defining the purpose/objective of the engagement
Developing Key Messages
Selecting an appropriate communication channel
Deciding Timing and Frequency. Establish consistent intervals for updates and consultations.
Maintaining Continuous Communication to build trust. Use progress reports, regular meetings and feedback loops to sustain engagement. These efforts allow stakeholders to contribute meaningfully to the process and stay updated on the company’s operations. Being open even about challenges and uncertainties builds credibility, fosters goodwill and increases stakeholder support.

Step 4: Monitoring and Evaluating Engagement Activities

Stakeholder engagement is not a one-off event but a continuous process that requires regular interactions to keeps stakeholders connected, informed and valued. Regular monitoring and evaluation of stakeholder engagement activities are essential to track their effectiveness and ensure continuous improvement to meet evolving stakeholder expectations.

Stakeholder Engagement Tools

Measuring the success of stakeholder management activities ensures that the engagement plan delivers its intended impact or addresses any gap or challenge that emerges. There are tools to assess stakeholder sentiment, identify engagement gaps, and evaluate risks. A combination of quantitative and qualitative methods can be used to evaluate stakeholder engagements.

Quantitative tools include the use of surveys, feedback forms, engagement metrics (e.g. participation rates, response times, stakeholder satisfaction and project outcomes). Qualitative tools include interviews and focus groups. Some stakeholders may benefit from additional resources, personalised support or access to tools to encourage active participation.

Key Trends Shaping Stakeholder Engagement

Stakeholder engagement is rapidly evolving from a one-way information flow to a dynamic and interactive dialogue. The emerging trend lies in adapting to new technologies and leveraging digital communication tools to meet evolving stakeholder expectations. Organisations must foster continuous engagement by investing in the right tools and platforms.

Emerging Technologies: Advanced data analytics, artificial intelligence (AI) can now be used to analyse stakeholder behaviour and preferences, automate engagement follow-ups and sentiment analysis.

Digital Engagement Platforms: The rise of social media is transforming stakeholder interactions. Social media can broaden outreach to hard-to-reach stakeholders; enable real-time updates and rapid response to concerns. Social media can also support efforts aimed at demanding transparency and accountability.

3. Virtual Tools for Participation/ Webinars

These tools (Zooms, Microsoft Teams) offer convenience, accessibility and inclusivity particularly for remote or global stakeholders.

Regulatory and Societal Expectations

Government and stakeholders now demand transparency, accountability and commitment to sustainability.

5. Stakeholder Relationship Management (SRM) Software – Centralises interactions, sentiment tracking and engagement outcomes. It enables collaboration across teams and accelerates critical decision-making.

Benefits of Effective Stakeholder Engagement

An effective stakeholder engagement strategy offers significant benefits for both short-term project execution and long-term organisational sustainability. Thus, investing in stakeholder engagement can create a “win-win” scenario by aligning business objectives with stakeholder expectations. Some of the key benefits are:

Builds trust, loyalty, and long-term support through ongoing engagement. Fosters support for future projects by creating value.
It helps to identify risks and opportunities, anticipates and mitigates issues early and prevents delays. Grievance management is a critical component. Providing simple, accessible ways for stakeholders to raise concerns helps to mitigate risks before they escalate.
Enhances Reputation: Positive stakeholder engagement improves media relations, brand equity and social acceptance.
It spurs innovation: Engaging stakeholders provide valuable insights that can lead to better products, services and operations.
Better Decision-making: Involving stakeholders ensures decisions are well informed, balanced and supported. Achieve better project outcomes and positive social impact.

Challenges in Stakeholder Engagement

Stakeholder engagement can present various challenges, especially in organisations with weak engagement culture. Common challenges evolve around:

Keeping an up-to-date view of evolving stakeholder relationships.
Managing conflicting interests and resolving concerns promptly.
Coordinating with large and diverse stakeholder groups.
Ensuring consistent records across different communication tools.
Ensuring compliance with stakeholder-related regulations and expectations.

In today’s dynamic and interconnected business environment, stakeholder engagement is a strategic necessity for long-term organisational success. A well-structured stakeholder engagement strategy enables companies to identify and prioritise key stakeholders, understand their needs and build meaningful relationships that create shared value. While challenges exist, they can be addressed through inclusive planning and timely dialogue. In all considerations, effective stakeholder engagement must align business objectives with social expectations, strengthen reputation and ensure long-term resilience and sustainability.

BERNARD BEMPONG

Bernard is a Chartered Accountant with over 14 years of professional and industry experience in Financial Services Sector and Management Consultancy. He is the Managing Partner of J.S Morlu (Ghana) an international consulting firm providing Accounting, Tax, Auditing, IT Solutions and Business Advisory Services to both private businesses and government.

Our Office is located at Lagos Avenue, East Legon, Accra.

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