1. A strategic approach
to stakeholder
engagement
.
Dr Leeora Black, Managing Director, Australia Centre fro
Corporate Social Responsibility
Richard Lambell, Senior Consultant, ACCSR
Brought to you by

2. - MASTER CLASS –
A STRATEGIC APPROACH TO
STAKEHOLDER ENGAGEMENT
Presented by Dr Leeora Black
Managing Director, Australian Centre for Corporate Social
Responsibility
The Australian GRI Conference on Sustainability and
Integrated Reporting
26 March 2012

3. YOUR BIG QUESTION
• What is the ONE big question you have now about
stakeholder engagement practices in your
organisation/daily work?

4. WHAT WE WILL COVER
One big idea
• When it comes to stakeholders, managers are short-
sighted
• Managers need a 360-degree view of the stakeholder
terrain if stakeholder engagement is to improve
reporting, strategy and organisational performance

5. CHANGING ORIENTATION TOWARDS
STAKEHOLDERS
Maximise Social,
Environmental &
Economic Value
Engage (Sustainability)
Respond Enhance Reputation
Avoid Harm
Comply
Source: Adapted from David Wheeler, Shulich School of Business, York University

6. TRENDS IN STAKEHOLDER RELATIONS –
HOW TO ENGAGE
From To
•Bilateral and transactional • Longer term multilateral
relationships. relationships
•Engaging around • Engaging around
organisational issues. organisational and
societal issues.
•Tactical and reactive.
• Proactive and
•Emphasis on risk collaborative.
mitigation and reputation.
• Emphasis on learning,
innovation and mutual
value creation.

7. STAKEHOLDER VIEW - TRADITIONAL
Unions
Customers Employees
YOU
Communities Regulators
NGOs Suppliers

8. NEW VIEW
Source: ACCSR. Report on the Stakeholder Survey for the NSW Minerals Council. April 2011

9. DEFINITION OF A STAKEHOLDER
Individuals,
groups or
networks who
can affect or
are affected by,
an organisation.

10. DEFINITIONS: STAKEHOLDER
“Can affect or be affected by ...”
Impacts and issues
Issues arise in response to a perceived gap between expectation
and reality
Stakeholders get organised around issues.
.... Stakeholders
come in packages called issues!
Issues flow through networks

11. COMMON MISTAKES AND BLIND SPOTS
• Managers tend to focus on corporate-centric issues
rather than pubic issues
• Managers tend to conflate what is important to the
company with what is important to stakeholders
.... And create blind spots
for themselves and the company

12. THE STRATEGIC LIMITATIONS
OF CHECKLISTS
Examples of checklists:
• Lists of stakeholders for and against project
• Lists of issues that need immediate attention or not
Dynamic interactions are ignored
• Interactions of issues and stakeholders are ignored
• The role of ‘Bridging stakeholders’ is overlooked

13. PUBLIC ISSUES
To engage effectively on public issues, we need
High quality stakeholder relationships
AND
Motivation to collaborate

14. WHY RELATIONSHIPS MATTER
High quality stakeholder relationships are the key to
creating positive social impacts
Relationship Social Impacts
Leverage for change is in the relationship side of
cycle
High quality relationships produce more social
capital and are a foundation for social license to
operate

15. WHAT IS SOCIAL CAPITAL?
“... the stock of active connections among people: the
trust, m utual understanding and shared values
and behaviors that bind the members of human
networks and communities and make cooperative
action possible.”
Cohen and Prusak, 2000

16. SOCIAL CAPITAL AND
SOCIAL LICENSE TO OPERATE
Trust Economic Openness
(Listening & (Benefits me)
promise-
keeping) Information
Socio-political
quality &
(Benefits the
quantity
Motivation to region)
collaborate
Respect for Believable
people &
Shared goals
norms
for the future
(Consistent &
fair) Honest,
transparent
Social Capital Legitimacy communication
Building blocks of social license to operate

17. MODEL OF SOCIAL LICENSE TO OPERATE
Psychological identification - The
community has very high trust in the industry
and sees itself as sharing responsibility for the
company’s success. Stakeholders will advocate
for the company when necessary.
Approval – The industry has established both
legitimacy and credibility, and the community
approves of the industry.
Acceptance - The community listens to the
industry and considers its proposals. If, by their
own standards, they have no reason to doubt
the industry’s credibility, they may allow a
project to tentatively proceed.
Withholding/withdrawal - The rejection
level of a social licence is the worst case
scenario. This can manifest in complaints,
blockades and public action against individual
sites, companies or the industry as a whole.

18. HIGH SOCIAL LICENSE TO OPERATE
→ LOW SOCIO-POLITICAL RISK
Level of Socio-
Social license Political Symptoms
Risk
Withheld/ High Shutdowns, blockades, boycotts,
Withdrawn violence/sabotage, legal challenges
Acceptance/ Medium Lingering/recurring issues & threats, outside
Tolerance NGOs, watchful monitoring
Approval/ Low Company seen as good neighbour, Pride in
Support collaborative achievements
Psychological Very low Political unity against critics, sense of shared
identification future, co-management

19. STAKEHOLDER PLANNING MATRIX
Stakeholders motivation to collaborate with company
High
Low SLO/High High SLO/High
Motivation to Motivation to
Collaborate: Collaborate:
FRUSTRATED READY FOR
COLLABORATORS COLLABORATION
Medium
Low SLO/Low High SLO/Low
Motivation to Motivation to
Collaborate: Collaborate:
UNLIKELY TO FRIENDLY BUT
COLLABORATE INDIFFERENT
Low
Low Medium High
Level of social license (SLO) in relationships between company and stakeholders

20. PITFALLS TO AVOID
• Inadequate investment in relationship-building
• Selective engagement
• Failing to deliver on promises
• Failing to understand internal structure of the community
• Failing to listen and respect with over-reliance on legal
permits
• Failing to maintain close contact when there are changes
of personnel in the company
• Over-estimating the quality of the relationship

21. KEY TAKEOUTS
• Understanding the quality of relations within the
stakeholder network can give you:
• Insights for managing issues
• Insights for strategy
• And is the foundation for earning, maintaining and
strengthening your social license to operate.

22. THANK YOU
Good Luck!!!
www.accsr.com.au
leeorablack@accsr.com.au
Visit the ACCSR table during the conference!
Meet ACCSR people at the conference!