Understanding an organisation’s stakeholders
Stakeholder engagement has never been more important than in today’s volatile market. To succeed in the current uncertain and complex environment, ethical engagements are critical to create a strong foundation and protect the interests of all stakeholders.
In the context of advisory boards, stakeholder engagement needs to be considered from many angles. Every organisation operates within an ecosystem, and it is crucial for advisory board members to understand the network in which the business they are engaged with exists – whether it’s the start-up world, the business sector, or a large corporation.
To advance their understanding of the organisation’s ecosystem and ensure that the landscape it is operating in is considered when giving advice, advisors should prepare questions about the business’ stakeholders prior to advisory board meetings. This meeting preparation will also further the board’s agenda and promote rich conversation.
Advisory Boards focused on Stakeholder Engagement
In corporate environments, where there is an established corporatised advisory board supporting a governance board, stakeholder engagement can become quite specific and focus on an individual stakeholder and group of stakeholders. The increasingly popular customer advisory board is one great example of this.
Customer advisory boards are an incredibly cost-effective and interactive way to engage stakeholders in the co-creation of products and/or services. In 2021, the global leader in CRM, Salesforce, announced a customer advisory board whose goal was to provide strategic guidance and support the company’s growth in new markets. “Our customers are looking for trusted advisors to help digitally transform and deliver exceptional customer experiences,” said President, Chief Strategy Office and Chair of the advisory board at Salesforce, Alex Dayon. “This Global Advisory Board will be instrumental in our ability to accelerate our customers’ success from anywhere.”
Last month, Amazon advertised for a new position, Global Customer Advisory Board Manager, a full-time role which will work closely with cross-functional teams and stakeholders to build the advisory board infrastructure and operation at Amazon. With the rise of customer advisory boards, the requirement for internal roles such as this will increase to ensure the effective management of these types of boards in large corporates. The requirement for effective management increases for customer advisory boards because some or all the advisory board members in these scenarios will not be professional advisors, they will be customers or part of a customer group and therefore will be providing feedback, rather than advice.
Roles such as the internal advisory board manager and the independent Certified Chair™ are imperative to maximise the value of a customer advisory board and ensure there is an effective feedback mechanism in place to deliver the findings from the advisory board meeting back to the executive team. Establishing an advisory board dedicated to an individual stakeholder or group of stakeholders can be a life-changing business strategy – if deployed well. Without a carefully developed advisory board structure, there is potential to waste everyone’s time.
Another major area of growth in the corporate space is investor engagement. An advisory board may be established following an individual investment to provide confidence for the investor in not just the way the funds are being managed, but also how the funds are being deployed. The investment community will progressively use advisory boards in a productive way to help manage and increase investor confidence.
Corporatised advisory boards in larger organisations and advisory boards designed to engage stakeholder representation often include more participants, including a mix of internal and external members of the organisation. Conveniently, advisory boards are inherent flexible with an adaptable structure to fit the needs of any organisation and its stakeholders, at any point in time. One such recent example is the West Australian Government State Recovery Advisory Group, launched in 2021 and includes government representatives and twenty-four leading business, industry, and social groups.
WHERE TO FROM HERE?
Although the structure allows for advisory boards to be flexibly constructed and deconstructed, the flexibility does not extend to the independence of the advisory board Chair and its members. Ensuring that there is independence, grounds the advisory board and provides a strong foundation to allow for impact and risk management aligned with the advisory board’s purpose. Learn more about the importance of independence for organisations and advisors, and considerations for both.
Advisory boards with independent experts (including Certified Chairs™ of course!), assist organisations to harness the power of stakeholder engagement through strategies to encourage buy-in at all levels, and from all angles. For a business to truly connect with its stakeholders, internal and/or external, there is no one-size-fits-all approach, strategies must be carefully evaluated and executed, and if done right, the business and the people it impacts will both benefit greatly.