Andréa Sumé

The Importance of Stakeholder Engagement for Board Directors and Stakeholder Engagement

Directors are accountable for overseeing the business’s governance and have a fiduciary obligation to act in shareholders best interests. But boards must also consider the interests and requirements of all stakeholders – including employees, customers, suppliers and communities, investors and others. This kind of business approach is known as stakeholder management and is one of the core principles behind the ESG (environmental social and governance) movement that is changing the ways companies are run around the world.

A board of directors is a group of people who works together in order to accomplish the goals of an organization. It doesn’t matter if it’s setting the strategies, providing direction and support to management, or ensuring that the business is in line with its vision and mission A functioning board is crucial to the success of any business.

In terms of stakeholder involvement, a good board should seek out diverse perspectives in order to be aware of the unique challenges and opportunities the company is facing. They should also be able provide clear channels of communication between the board members and the stakeholders. This is not only an important aspect of corporate governance, but is also essential for establishing trust between the board and the stakeholders. Stakeholders are more likely to work with a company that is transparent and open regarding its reports, as it demonstrates that the board is committed to its responsibilities. Additionally, it can help to build a stronger image for the company and increase long-term valuation.

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