Wagging the Dog
The role of corporate communication in business decision-making
Every company has a hierarchy of interests affecting a variety of stakeholders. In theory, they would respond to all interests; in practice, organisations choose which to address and which to ignore. At FleishmanHillard Fishburn, we work with firms on corporate narratives that bring together all stakeholders as co-creators of a shared long-term future. But what does it mean, and why does it matter?
By Richard Costa | Client Partner | Investor Engagement
Keeping it real
As the primary vehicles for corporate narratives, all too often corporate websites and annual reports focus on illustrating the ‘shared value’ the company provides to its stakeholders. That’s great, but not enough. Acknowledging the interests of stakeholders is the right thing to do, but a degree of scepticism is to be expected: “Is there more to it, what is the company really up to?” And so, at best, the communication is ignored, at worst, it backfires.
When good governance is in place, being open about the reality of corporate self-interest is not something communication should shy from. In fact, good governance is instrumental to good performance. Corporate communication must highlight how the company manages the mutually beneficial relationships between the company and its constituencies. Put simply, great narratives demonstrate how responding to stakeholders’ expectations and necessities not only provides resilience in a demanding environment, it delivers a competitive advantage. This is something companies must shout about.
The new paradigm
At the recent Communicate Magazine’s ‘Evolution of the annual report’ conference 2019 in London, I had the pleasure of discussing a new normal, the high degree of collaboration between the board and corporate affairs in publicly listed companies.
The modern corporates affect the lives of individuals and communities through employment practices, environmental impact, influencing patterns of consumption, and the ability—or not—to compete globally. It is a big deal when a car manufacturer opens, or shuts, a plant; it is therefore important to run companies through a larger societal lens than the property rights of shareholders.
From a management perspective, corporate affairs teams find the best way of engaging with stakeholders. In turn, learning from the environment prompts the executive to take the right decisions, such as strategic investment or operational initiatives; or helps appreciate the downside of potential choices.
Authentic corporate narratives are upfront about including the company’s own interests and form the core of a productive dialogue with stakeholders. This network of relationships constitutes an alternative corporate governance system to the traditional shareholder-based approach, and one that better reduces conflict, mitigates risks, increases confidence and increases performance.