Companies that have begun to
consult non-governmental organizations (NGOs) about their social and
environmental performance have been warned that ‘stakeholder fatigue’
is beginning to set in
The warning has come from a group
of 30 corporate governance experts who say NGOs are in danger of
becoming overburdened with requests to take part in stakeholder
dialogue.
A summary document of discussions held in May by
the group of consultants, government officials, company executives and
NGO officers says there is ‘a sense of stakeholder fatigue’ among NGOs,
which lack the time and money to deal with the increasing number of
requests from companies for advice on issues such as human rights and
labour standards.
They add that ‘some civil society
organizations are fed up attending corporate dialogue events’ where
they feel they are being talked at by companies rather than listened
to, and say that even well-handled stakeholder dialogue exercises are
imposing an increasing burden on NGOs.
They conclude that
companies ‘need to be much more innovative in how they engage with
stakeholders’ and that dialogue should be more of a continuous,
low-level business activity rather than one-off large-scale surveys,
questionnaires and meetings.
The fact that some believe
stakeholder fatigue may be setting in raises important questions. Are
companies using NGOs as a cheap way of finding out what is going on in
the outside world? Whose views do NGOs represent? If they are being
overloaded, where will they get the resources to expand their work? If
companies give them money, they may no longer be perceived as unbiased.
The discussion summary details conclusions reached at a meeting
convened by the Centre for Tomorrow’s Company. Peter Desmond, an
associate of the UK think tank, says: ‘The benefits to both NGOs and
companies of stakeholder dialogue are now being more carefully
considered than in the past. A company’s key stakeholders are
investors, customers, employers, suppliers including business partners,
and the community. In the case of NGOs, it’s a different kind of
relationship. They aren’t as important as say, customers’.
Fiona King, international advocacy co-ordinator of Save the Children,
says: ‘We are now more choosy about the stakeholder dialogues we get
involved in. There is a slight sense of it all being a one-way flow [of
information and expertise] with all the flow going into companies,
which are very well resourced.’
Hilary Sutcliffe, head
of Shared View Social Responsibility consultancy, who took part in the
group’s discussions, says people are not over-doing things yet, ‘but
fatigue is certainly setting in. There’s a finite number of NGOs and an
almost infinite number of companies. NGOs don’t have time to give the
quality of feedback required.’
She adds: ‘We are asking an
awful lot of NGOs – we are calling on them to act as arbiters of the
public conscience, we’re asking them how to do things, and to stick
around afterwards to ensure we’re doing it right. Some NGOs are being
asked to do virtually a management consultancy job for businesses, and
I wonder how long that can go on. We also have to think about
accountability, because who is to say they know what they are talking
about?’
Sutcliffe says some NGOs – Amnesty International
among them – are considering the creation of dedicated ‘business
dialogue units’ to deal with requests for stakeholder input. However,
smaller groups may be unable to set up such units.
She
believes companies should make more use of day-to-day contacts. ‘It’s a
case of not saying, “let’s have a big stakeholder dialogue twice a
year”, but of using all the ordinary business contacts with
stakeholders to hold conversations and ask questions. There are lots of
opportunities to interact with stakeholders – such as when they open an
account with a bank. That might not help the NGOs, but they are often a
reflection of what society thinks, so by going to society we will have
less need to put pressure on them for their viewpoint.’
Walter Raven of Corporate Social Responsibility Consultants, who also
attended the session held in May, says another solution is for
companies to become more focused when seeking views from stakeholders.
‘The dialogue between companies and stakeholders has got to be more
incisive. It’s no good going on fishing expeditions – you’ve got to
have direct questions people can give direct answers to.’ Over-reliance
on general stakeholder dialogue can be dangerous, he warns. ‘It assumes
that the stakeholders know what they’re talking about, that they’re
interested and are willing to contribute, and that you are asking the
right questions. It’s like computers. If you put rubbish in, you get
rubbish out.’
