Promote Goodwill and Support of Stakeholders*

In another article we dealt with managing relations with shareholders and other stakeholders. The final piece of the puzzle is to make sure that individual directors and the board promote goodwill and support of shareholders and other relevant interested parties.

We have dealt with mainly formal relations and communications. Now we focus on an attitude of mind and informal relationships.

Organisations can have a wide range of cultures. Some see themselves as competitive, with a sporting analogy, some are more military in their approach. Others are creative, or cutting edge. Some are nurturing a new entity or are stewards for a legacy.

Organisation culture is a powerful force and both reflects and shapes the way an organisation operates. It is part of why people work there and even why people do business with it.

You tamper with it at your own risk. However, cultures can become introverted and out of touch with the environment, they can be left behind by developments. Most important, they can damage relationships with stakeholders.

Leadership comes from the top. Board behaviour and director relationships are important factors in setting and communicating a culture.

Now that you have identified the stakeholders of your organisation and reviewed relations, the question is what lead is the board setting.

Is the entire board committed to enhancing goodwill with these groups? Take a step back and view the board with an independent eye.

• What is the formal approach to shareholders and stakeholders, including employees?
• What actually happens?
• What underlying attitudes are revealed by jokes and comments around the boardroom table?

All directors are responsible for the relations with outside parties, though responsibilities for liaising with different groups might be delegated to specific directors.

Corporate governance check

• Is the entire board committed to enhancing goodwill with shareholders and stakeholders?
• Do directors' relationships, and behaviour, demonstrate a willingness to be appropriately accountable for company actions?
• Is responsibility for liaising with different groups clearly delegated to specific directors – do you know which parties you are responsible for?
• Are there procedures for managing routine relationships with these groups – and for times of crisis?

* Inspired by the Institute of Directors Standards for the Board

What to do next

If you would like to know more about how we can support your personal development as a director, facilitate an away day or corporate retreat, or assist with your board's corporate governance, contact us or call +44 (0) 7970 891 343.