How communicators can capitalize on the stakeholder capitalism trend

By pushing execs to prioritize ESG, employee well-being and workplace inclusion, comms pros can bolster their organizations—and rise to new levels of influence.

Capitalizing on the stakeholder capitalism trend

Corporations exist to make a profit. Or is that not the whole story anymore?

Companies are increasingly expected to behave in a manner that’s viewed as responsible, ethical and environmentally sound. Anything less than transparency, sustainability and civic-minded charity is no longer acceptable. For communicators, it’s a strategic shift that’s too profound to ignore.

As social media scrutiny intensifies—and consumer expectations ratchet up—businesses must aspire to a higher standard of operations. That means pursuing the entire alphabet soup—ESG, CSR, PR, DE&I—with gusto. And substance.

A new report from The Conference Board parses these issues in great detail, presenting a case for wholeheartedly pursuing the “stakeholder capitalism” trend. The data, which is helpfully segmented into takeaways for HR pros, legal officers, marketing execs and CEOs, also features insights exclusively for communicators.

A ‘durable’ shift

The report features insights from a swath of senior communication officers, who agree that “those who have no ‘stake’ in a company, but who can ‘shape’ public opinion and a company’s reputation—are becoming more prominent in the deliberation over corporate strategy and the setting of expectations.”

Reaching such a diverse slew of audiences will require new tactics—and partnerships. The report hammers home the importance of prioritizing collaboration among execs and other department heads to ensure “the firm is telling its sustainability story authentically, effectively and reliably to multiple audiences.”

Concrete steps to take include:

1. Communication executives must be masters of data.

One respondent shares: “To be credible about ESG issues, you need clear measurement of impact. Only then can we communicate it to stakeholders to show there is action behind the words.”

The trick for comms pros is finding the story hidden behind the data and telling that story in a compelling way.

2. Communications leaders are moving beyond the role of chief spokespeople, becoming more strategic advisers and coaches within companies.

As one respondent explains, “We have to make our leaders become better storytellers. We have to be more proactive and tell our own story rather than waiting for others to tell it for us. We have to get our executives to be more open to and ready to respond to increasing challenges in the public arena. There are a lot of land mines out there.”

This tracks with data published in the recent The HarrisX/Ragan CEO-Communicators Competencies Survey, which found that “leadership” is the No. 1 skill CEOs want from their comms chiefs.

3. Communications leaders now also play a key convening and coordinating role, covering ESG topics to foster alignment across the full enterprise.

One respondent explains:There were pockets of the social and governance initiatives in different functions with different teams reporting to different leaders. We finally created an ESG office to thread all this work together. It’s really a convener-type role, but it created a more cohesive look. We found we do a ton of work on these issues, but it was never articulated in a comprehensive way. We now have a great story to tell.”

Again, this speaks to the need for communicators to boldly smash down siloes and become organizational bridge builders between whatever departmental “kingdoms” exist.

4. Even in the unlikely event that everyone goes along with this shift, the trade-offs are highly challenging to explain to different stakeholders.

How will you convince skeptics or cynics in your midst?

You can’t and won’t please everyone all the time. Moving forward, the onus is on communicators to explain corporate decisions with clarity and transparency—and to consistently gather candid feedback to ensure everyone at least has their say (if not their way).

5. Senior communications executives need to bring greater managerial proficiency and people skills to their work.

Specifically, communicators should hone:

  • Listening skills, to conduct those difficult conversations that must be held.
  • Relationships building, to ensure all audiences feel heard.
  • Self-awareness, to prevent personal biases from clouding judgment.

6. While senior communications executives must rely on strong persuasion skills to convince business leaders to act, they should seek support from their CEOs in defining their broader role and authority level in the organization.

This is another major issue explored in the HarrisX/Ragan CEO-Communicators Competencies Survey. CEOs often feel they are ultimately responsible for internal communication. These sorts of blurred boundaries about roles and responsibilities can thwart your efforts and effectiveness—and diminish your influence. Moving forward, comms pros should strive to clarify what falls within their mandate.

What this new frontier means for your role

The report offers predictions for the future of the comms function:

1. Proficiency in traditional communication methods and platforms is no longer sufficient.

Rather, The Conference Board suggests focusing on:

  • A deep and comprehensive understanding of the business’s impact on stakeholders, society and the environment.
  • A deeper familiarity with stakeholders and “shapeholders” and their views, even down to a small activist group whose voice could prove influential.
  • More critical analytical skills to help set priorities.
  • More two-way engagement skills.
  • Full understanding of the platforms, especially social media, that are most effective in reaching different stakeholder groups.

2. Communications teams need to be brought in earlier on business decisions.

You can’t influence strategy unless you already have a seat at the decision-making table.

3. The communications function needs to think more systemically and globally.

Say farewell to the all-staff email blast. Prioritize targeted, segmented messaging moving forward.

4. Changing demands for communications teams will cause a reorganization within the function.

This might mean shifting focus away from materials that don’t get much traction (such as neglected newsletters)—and reorienting your work toward more substantive business objectives.

Over to you, communicators. Is your company moving toward a stakeholder capitalism model? If so, how? If not, why?

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