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Although investor and stakeholder relations can’t be measured or calculated on a spreadsheet, their value can significantly impact your company’s bottom line. Your brand’s reputation and success are contingent upon effective relationships with not just clients, but also with others affected by how you do business. In short, healthy stakeholder and investor relations are crucial for running a sustainable enterprise. Here’s a quick how-to guide and best practices in stakeholder management.

 

Identifying key players

Your stakeholders will vary depending on your enterprise. There are two main categories of constituents who can affect outcomes.

• Internal: owners, managers and employees
• External: current and potential clients/customers, suppliers, investors/shareholders (if you’re a publicly traded company), government regulators (depending on your industry), professional associations and industry analysts. Even competitors are considered stakeholders because they have a legitimate interest in the outcome — success or failure — of your company.

 

Rank your stakeholders

After you’ve made a list of stakeholders, it’s time to determine who gets how much of your company’s resources. While all constituents are important in their own way, not all deserve the same amount of attention. To rank them, put each of your stakeholders in a power-interest matrix.
Where to focus your energy depends on your business model. If your company touts the sustainability of its products, you’ll need to cultivate deeper relationships with suppliers with a low carbon footprint and whose raw materials are ethically sourced; vendors who stray from this goal will become liabilities rather than assets. In consulting companies, the “products” are the analysts and strategists and the advice they give. The linchpin of such enterprises is creating and managing a dream team, so employees would be considered high power and high interest. In addition to human capital, financial services have to give priority to government regulators, considering the increase in compliance and reporting mandates in this sector.

 

You should closely manage those with high influence and high interest, while stakeholders with low power and low interest simply require monitoring.

 

Best practices for stakeholder relations

Once you’ve decided how much attention each party should get, it’s time to strengthen stakeholder relations.

• Trust: The foundation of solid stakeholder relations is transparency. To build trust, good leaders practice regular open communication and keep stakeholders in the loop, especially when there’s bad news. The more constituents know, the better they can understand your business issues and make informed decisions. In the case of investors, you can cultivate trust — and minimize the chances of a proxy contest — by listening to their issues.
• Delivering on promises: To keep stakeholders happy, prioritize customer service and quality products. Consistently meeting expectations, including quarterly performance targets, is also a good way to connect meaningfully with external stakeholders such as industry analysts and potential investors.

• Integrity: Operate an organization that stands for something positive and conducts business in an ethical way. Some investors and corporations that practice philanthropy fund only socially responsible companies. Prioritizing integrity is also a smart way to stay in the good books with government regulators.

• Mutually beneficial relationships: The best connections are ones in which both sides are satisfied. Everyone wants a fair deal and to be treated respectfully. Employee stakeholders, for one, feel valued when you offer more than just a competitive salary for their hard work and dedication. Profit sharing creates loyalty and improves retention, and so do career development and leadership training opportunities.
• Social media: Nowadays, investor relations comprise much more than just annual reports, shareholder meetings and press releases. Not only can social media provide a regular stream of information to stakeholders, platforms such as Twitter, Facebook and LinkedIn — when used correctly — encourage meaningful two-way conversations and bolster stakeholder relations. Tracking social media is also a great way to stay on top of rumours and gather market intelligence, says Sandra Novakov, investor relations director at the UK-based PR agency Citigate Dewe Rogerson.
• Investor relations professional: With investor relationships growing in scope and relevance for publicly traded companies, perhaps your organization could benefit from the guidance of a professional. The Canadian Investor Relations Institute (CIRI), partnering with the Ivey Business School, has created a program to certify practitioners who desire a formal education in this field. Taking 10 months to complete, the Certified Professional in Investor Relations (CPIR) designation covers capital markets and regulations, communications, corporate governance, finance, securities law and more.

 

Smart leaders don’t take stakeholder engagement for granted. They understand the importance of developing a solid strategy, communicating their company’s story and cementing relationships with top constituents.

 

This article is provided courtesy of Robert Half Canada, parent company of Accountemps, Robert Half Finance & Accounting and Robert Half Management Resources. Robert Half is the world’s first and largest specialized staffing firm placing accounting and finance professionals on a temporary, full-time and project basis. Follow Robert Half Management Resources at http://www.twitter.com/RobertHalf_CAN for workplace news.