Societal expectations around ESG factors are evolving rapidly, pushing companies to prioritise sustainability, social responsibility, and ethical practices. Stakeholders want organisations to demonstrate a commitment to these values. Yet how can companies ensure their communication is both sincere and impactful?
Our latest APAC report, a collaboration between Black Sun Global and the Singapore Institute of Directors (SID), uncovers significant gaps in stakeholder engagement among listed companies. Highlighting the urgent need for transparency, it offers insights into how companies can better align with stakeholder values, whilst demonstrating tangible positive impacts.
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"Stakeholder engagement is about building and nurturing two-way relationships with anyone who has a stake in your organisation... the result is a consistent, positive reputation that attracts customers, bolsters employee morale, and builds lasting relationships with key stakeholders.”
-Uantchern Loh, CEO APAC, Black Sun Global
The research, grounded in Black Sun Global's BEAMS+ principles, assessed 80 companies in Singapore across various market capitalisations using 100 audit questions. Public disclosures, annual reports, sustainability reports, company websites, and social media were analysed to evaluate stakeholder engagement practices for investors, employees, customers, suppliers, and the community. Additionally, an online survey garnered over 200 responses from board members and investors.
Our analysis shows a significant gap between acknowledging the importance of stakeholder engagement and effectively linking it to corporate governance. Companies need to communicate how governance mechanisms oversee stakeholder engagement practices to build trust and accountability.
Effective stakeholder engagement requires comprehensive communication strategies. However, many companies fall short, with inadequate management of stakeholder concerns and relationships. Authenticity in engagement and responsiveness to feedback are crucial for maintaining trust.
There is a need for inclusivity in governance, ensuring that decisions incorporate diverse stakeholder perspectives. Large-cap companies tend to perform better in investor engagement, while smaller companies need tailored strategies to build trust across all stakeholder groups.
Stakeholder priorities vary by industry. For example, industrial companies score highest in employee engagement due to health and safety emphasis. Companies must adapt engagement strategies to address the unique concerns of their key stakeholders.
As societal expectations evolve, companies must view stakeholder engagement as a strategic imperative. The "Empowerment through Engagement: Sparking Inclusive Conversations" report offers actionable insights and recommendations for companies to enhance their stakeholder engagement practices, ensuring trust and support from key stakeholders for sustainable success.
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