Building Societal Value into the Bottom Line: Moving from Shareholder to Stakeholder

A CHOICE FOR THE GREATER GOOD EMERGES

The times, they are a changing, and in a way that would make Bob Dylan proud. Canadians are showing their  true colours about what it takes to gain their trust – and their investment dollars – in their response to the 2011 Edelman Trust Barometer. When it comes to what Canadians expect from companies they put their money into, it’s no longer the status quo that many publicly-traded entities banked on in the past.

A full eight out of ten respondents to the survey indicated a preference for a more collaborative approach, where alignment and investment in societal values are an important bottom line consideration, versus the expectation of maximized shareholder returns by whatever means deemed best by the company.  This represents a paradigm-shift in thinking from Trust results in previous years, that creates both opportunity and challenges in changing entrenched corporate thinking.

SAY GOODBYE TO THE “OLD SCHOOL” APPROACH

This shift in attitude may prove to be difficult for some natural resource-based companies, many of which have been working under the old trust regime, or “fortress framework”, where they have guarded their brand fiercely through controlled one-way information and highlighted profits over partnerships.  In the new reality of what is expected, a new trust architecture is emerging where engaging the public in two-way dialogue and demonstrating profits with a purpose are what investors want. We can predict that companies will feel the pressure from stakeholders to move towards that which may be completely outside of their comfort zone. But without moving towards the new model and approach, greater risks and barriers to success emerge, ranging from shareholder discontent to vocal local opposition movements.

PUBLIC ENGAGEMENT AS THE WAY FORWARD

Success in regaining and building trust is embracing tools and tactics that engage communities, stakeholders and validators in a meaningful way, but many don’t know where to start. An example of a first step could be a studied, measured approach to determine of social media channels (Twitter, Facebook, YouTube. LinkedIn), traditionally underutilized by the sector. Engaging through social media can be a door opened to demonstrate humility, openness and transparency and that speaks volumes about your company’s commitment while giving you new insights and valued data into what your shareholders are thinking, feeling and talking about when it comes to your business. There are myriad other tools and tactics that can also work in your favour including your own website that can be modified to be a channel for dialogue.

Investing community sponsorship programs created with local stakeholder input, hosting community roundtable discussions or offering operations tours for the public are other options to engage in meaningful and purposeful ways.  Ways that will not only build up a trusted following among unexpected groups, but also will translate in time, to shareholder returns achieved in a way that meets the expectations of today’s investor.