Stakeholder Engagement - Cranfield School of Management ...

4
Tone from the Top: the Leadership Role of the CEO
4.6 Tone from the Top: the Leadership
Role of the CEO
Appropriate leadership is fundamental in the building of
meaningful engagement by an organisation, exemplified by the
role of the CEO in convincing employees, investors and clients
that engagement with a broader set of stakeholders is
worthwhile. Even if an organisation has the appropriate
capabilities and organisational culture to allow meaningful
engagement to develop, without the approval and active
leadership through both words and deeds of a CEO, it is unlikely
to be successful.
Example: A Role for Leaders in
Stakeholder Conversations
A senior executive of an energy organisation described
his nervousness regarding the outcome of the very
first meeting that the organisation planned with a
series of stakeholders to discuss environmental issues
related to the impact of their operation:
“It was also the first time for the organisation to reach into
the territory of meeting with the NGOs, so it was a very
tough meeting.”
The chairman and managing director of the
organisation both agreed that they needed to be
present to demonstrate the commitment of the
organisation to the issue and to the dialogue with the
stakeholders.The meeting was extremely turbulent as
stakeholders aired their views, concerns and
grievances and about the actions of this specific
organisation as well as others operating in the region,
and outlined their opinion that the organisation was
damaging the environment and not acting responsibly.
The chairman and managing director had the
credibility to talk frankly to stakeholders about the
weaknesses of the organisation, and obstacles that it
still faced to build relations with stakeholders.Their
presence reinforced the seriousness with which the
organisation regarded the process. Furthermore they
were able to describe in detail the issues related to
procedures that have environmental impact such as gas
flaring and the efforts made by the organisation to
improve these processes.
The senior executive described the impact of the
meeting as a ‘paradigm shift in our relationship with the
NGOs’, and that this would not have been possible
without the clear leadership from the very top of the
organisation.
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The following is a checklist
of issues to help managers
assess and understand if
their CEO and other senior
management are playing an
appropriate leadership role to
develop a situation where the
organisation can successfully
develop meaningful
engagement.
❖ Does the CEO actively engage all the staff in
his/her vision for stakeholder engagement for
the organisation?
❖ Is the CEO actively engaged in the development
of stakeholder policy in the organisation?
❖ What percentage of time does the CEO dedicate
to stakeholder issues?
❖ Is the CEO actively engaged in discussions
with stakeholders?
❖ Does the CEO promote staff within the
organisation who have championed
meaningful engagement with stakeholders?
❖ Do those responsible for developing stakeholder
strategy report directly to the CEO, and do they
have the opportunity to utilise his/her time and
energy to strengthen the strategy?
❖ Does the CEO utilise inputs from stakeholders
to help shape the future development and
direction of the organisation both internally
and externally?
❖ How does the CEO describe the use of
stakeholder inputs? Is it for external reputation
improvement or internal change, or both?
❖ Does the CEO regularly advise the Board on
stakeholder engagement? What level of
awareness is there on the Board regarding
stakeholder engagement?