The Importance of Stakeholder Engagement for Board Directors and Stakeholder Engagement

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Directors are responsible for the overall direction of a company and as such, they have the obligation of acting in the best interests of shareholders. But boards must also consider the needs and interests of all stakeholders — including employees, suppliers, customers as well as communities, investors and others. This is known as stakeholder management. It’s one of the core principles that are the basis of the ESG (environmental social and governance) movement that is changing the way companies are managed across the globe.

The board of directors can perform a variety functions within the company but at its heart it’s a team who works together to achieve its goals. Whether that’s setting guidelines and assistance to management, or ensuring that the company is operating in line with its vision and mission, a well-functioning board is essential to the success of a company.

A good board will seek out a variety of perspectives to better understand the specific issues that the company has to face. They should also be able create clear channels of communication between the board members and stakeholders. This is not only an essential aspect of corporate management, but it is essential to build trust between stakeholders and the board. Stakeholders are more likely to cooperate with companies that are transparent and transparent about their reporting practices, as it shows the board is committed to its responsibilities. Additionally, it can help to build a stronger image for the business and increase the value of the company over time.

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