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Stakeholder confidence: telling the right story, the right way, at the right time - EY - Global

Growing Beyond: how high performers are competing for growth
in difficult timesStakeholder confidence: telling the right story, the right way, at the right time

All companies tell
a story to their stakeholders –
and some do it better
than others.

Stakeholder confidence comes from the engagement that is felt by both internal and external stakeholders, with the result that they support management with the investment of either their cash or their talent.

Confidence within the organization and about the organization is critical if management is going to be able to push through the changes that the “new normal” requires. That confidence starts with management itself and their belief in their ability to affect change. Indeed, top-performing companies are taking a longer-term view to boost stakeholder confidence.

High performers are communicating better …
All companies understand the importance of accurate financial reporting and compliance with regulations. High performers are also significantly ahead on the quality of their communication to their stakeholders and the market.

We asked third parties about the extent to which companies were meeting the needs of their stakeholders. Despite the relatively better achievement of high-performing companies, what is striking is the gap that is still perceived to remain.

How well are the information needs of stakeholders met?

Area

% of satisfaction

% difference:
high vs. low

Current performance and future forecast

46

+42

Risk exposure and risk management

43

+29

Greater emphasis on long-term reputation management

41

+37

Future business planning and forecasting

39

+39

Coverage of environmental performance and corporate social responsibility CSR

34

+23

     

... and are taking a longer-term view of stakeholder management
High performers talk about specifics: they share both broader and granular detail with more coverage of non-financial KPIs, putting significantly more effort into identifying and managing risk, and proactively measuring and reporting their environmental performance.

They place more attention on their long-term reputation management: and take action to ensure a long-term relationship with business owners, financiers, key contributors and influencers and the communities they touch: they are also more likely to discuss the impact of regulatory change and potential environmental risks.

On internal engagement:

An engaged workforce is a productive workforce
One of the key differentiators between top performers is the way that they have engaged with their internal stakeholders as critical contributors to the achievement of their growth strategies.

Top performers are focused on broadening their workforce skills, equipping their teams to be more productive through training, mentoring and sharing knowledge, and improving internal communications.

Our recent research clearly shows that an engaged workforce is a more productive one. Indeed, a major recent study has shown:

  • The best-in-class engaged group has an 11% improved level of retention over those groups who are below average, and an impressive 8% better performance even than those who are above average.
  • Results are even more striking for productivity: the best-in-class group scores 60% higher than the below average group, and 24% better than the average.

The most productive workforce reflects the market
The new normal is complex. Managing market variation and effective innovation in a fast-changing market creates a significant management challenge. Multiply that by engagement in a number of markets and the challenge can grow to be a real obstacle to progress.

Involvement is the foundation of engagement
Top performers aim to create a harmonious company culture that strongly connects employees and management. High-quality relationships in the work place are the key to engagement. They invest in training and encourage innovation and find inventive solutions to attract and retain key people.

Involvement is a major source of motivation and fosters the innovation the company needs to flourish and reach better performance targets. Top performers use communication to keep their workforce engaged and motivated.

For further information on this subject, see Stakeholder confidence: moving forward together – for the long term

Topics covered include how to take a longer-term view to boost stakeholder confidence

  • Keeping stakeholders involved – the need for transparent reporting, including sustainability issues; legal and regulatory business requirements
  • Risk management – IT risk; international trade
  • People and organization – building flexibility into the workforce; investing in the company’s employer brand; employee compensation
  • Sustainability reporting

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