Why is it important?
Companies rely on a range of stakeholders to operate and succeed including governments, employees, communities, investors, consumers and suppliers. Effectively engaging with stakeholders is key to maintaining this licence to operate.
Good risk management requires companies to clearly identify their key stakeholders and have a
strategy for effective engagement. Our members consider it part of their fiduciary duty to engage with companies to ensure that social risks are appropriately mitigated.
Acting in the best interests of the company over the long term necessarily means considering the interests of stakeholders such as employees, communities, consumers, suppliers, regulators and governments, in addition to the interests of investors.
Companies should recognise that they rely on a range of stakeholders to operate and succeed. We expect companies to articulate how they take into account the views of various stakeholders,the level of social risk they are willing to accept and the action they take to manage social risk.