WE ARE IN AN AGE of stakeholder activism. From single billionaires seeking to disrupt boards to activist "Davids" in the field launching stones at the temple of these global "Goliaths," more and more-passionate--and very vocal--critics are scrutinizing how corporations handle issues like energy, water use, conservation, and social justice. It has become clear that the very identity of the corporation has evolved into something new.
Corporate mansions have taken on the role formerly held by nation states like France or England. In fact, since the turn of this swift century, they have made up more than half of the world's largest economies. This revised role implies an expanded sense of responsibility that reaches far beyond the old "making money for shareholders" focus. The problem is that too many corporate leaders forget that each of these mansions is set square in a social neighborhood, where lawyers, investors, regulators, and concerned citizens can see through the windows.
These stakeholders ask four fundamental questions: Are there human beings in there running this place? Why do they not answer my call? Is this mansion a genuine part of our neighborhood, or can we convince them to be? What do the residents of the mansion make or do that might impact my children's future?
It is time to redesign the corporate mansion with more and larger windows, more transparency from the top to the actionable managers, and more ways for outsiders to sprint up their stairwell to the key executive councils. This can seem like an overwhelming task to leaders who feel--often rightly so--that they are being demonized. Yet, it can and must be done, for the good of the company and the community.
Stakeholder engagement breaks the hold of corporate demonization. Your first objective when dealing with outraged activists can be summed up in one word: humanize. Humanize your company and even your adversary. It only is by displaying your place and awareness in the neighborhood of concerns that you can be trusted again and made part of the debate and discussions before you. Corporate strategy, once the realm of only the general council, the business profit-and-loss leaders, and the board, now is something more available for inspection.
We do not advocate disclosing your corporate strategy, your competitive advantage. Instead, companies are beginning to offer stakeholders a chance to reply to key public choice points about their supply chain, their choices of energy selection,...