: PRIORITIZING STAKEHOLDERS AND ISSUES

Engaging with all stakeholders or on all issues is neither possible nor desirable.
Th is would go beyond any available resources, and at the same time make it very
diffi cult to adequately respond to stakeholders, leading to frustration. Th erefore,
you should try and prioritise your stakeholders and issues to ensure that time,
resources and expectations are well managed.
Th e previous processes have enabled an initial overview of the materiality of
issues and the related concerns and expectations of stakeholders, as well as over
their relationship to the organisation’s strategic objectives. However, further
factors need to be considered before deciding on priorities for engagement.
Prioritisation is diffi cult because it is often not possible to quantify the various
‘stakes’ and make objective comparisons. Nevertheless by setting clear criteria
for prioritisation linked to the company processes and business strategy you
are better able to steer the engagement away from being driven by un-strategic
considerations such as the ‘noisiest’ stakeholders, the short-term focus of the
media, or the comfort-zone of managers. Below are two ways of prioritising
stakeholders:
Prioritisation according to the social maturity of issues
One useful way to understand the wide range of issues raised by the diversity
of stakeholders is to consider the maturity of the issues. Pharmaceutical
company Novo Nordisk created a scale to classify issues according to their
maturity (see box).
SIG’s Initial Prioritisation and Categorisation of Stakeholders
The Swiss utilities company SIG started the process of prioritisation with a discussion amongst the executive management team.
The sustainable development team facilitated the discussion. It identifi ed an ‘a-priori’ set of stakeholder categories: shareholders,
clients, business partners, employees, public contractors and civil society interest groups.
The expectations of these groups, and their degree of satisfaction with SIG’s performance, were subsequently evaluated in various
dialogues with stakeholders. Existing customer surveys also served to shed further light on these subjects. In the prioritisation of
their stakeholders, SIG considered their importance to SIG’s strategic business objectives, and their current degree of satisfaction.
Think Strategically
– Some activist communities and NGOs are aware of the issue.
– There is weak scientifi c or other hard evidence.
– The issue is largely ignored or dismissed by the business community,
– There is political and media awareness of the societal issue.
– There is an emerging body of research, but data are still weak.
– Leading businesses experiment with approaches to dealing with the issue.
– There is an emerging body of business practices around the societal issue.
– Sector wide and issue-based voluntary initiatives are established.
– There is litigation and an increasing recognition of the need for legislation.
– Voluntary standards are developed, and collective action occurs.
– Legislation or business norms are established.
– The embedded practices become a normal part of a business-excellence model.
Latent
Emerging
Consolidating
Institutionalised
The same issue can be at diff erent stages of maturity in diff erent regions
or countries, and in diff erent industries. For example, biodiversity is an
institutionalised issue for European businesses, but an emerging one in North
America, whilst employee privacy is only an emerging issue in Europe but
already institutionalised in the US. Similarly, whilst animal welfare has been on
the agenda for the pharmaceutical industry for some time (in relation to animal
testing) and business norms on animal testing have now become institutionalised
in this industry, within the oil and gas industry it is only now emerging as an issue
of controversy and debate, although animal welfare NGOs express much concern
about the use of animals in testing petrochemical products.
While acknowledging the fact that issues, which are high on the ‘maturity
ladder’, receive quite a lot of attention in various ways, this does not mean
that the societal debate about its resolution is over. At the same time, high
social maturity also does not necessarily imply that a sustainable solution
has been found – nor that the current approach is acceptable to the majority
of stakeholders. Th erefore, an effi cient process of stakeholder engagement
needs to be open to constant change and to the involvement of changing
stakeholder groups, even if the issue is becoming increasingly institutionalised.
A good example of this is the development of corporate reporting practices on
environmental issues in the last 20 years.
At each Stage of maturity there is a diff erent mix of stakeholder expectations,
external pressures, risks and opportunities, all of which are essential to
understand in prioritising areas for engagement and planning the actual
engagement processes.
STAGE 1
The Four Stages of Issue Maturity
THE PRACTITIONER’S HANDBOOK ON STAKEHOLDER ENGAGEMENT | 41
In general, the more mature an issue is, the more essential it is for a company
to address the issue. However, the response to the issue also depends on the
company’s general approach towards stakeholder engagement, or issues of
corporate responsibility more generally. Th e table below illustrates the way that
a company, which considers stakeholder engagement as an opportunity, might
typically decide to react to each Stage, as well as the reactions of a company that
takes a more defensive, reactive approach.
Leadership company’s
stakeholder engagement
process.
Maintaining ongoing dialogue
with NGOs and stakeholder
opinion leaders.
Working with an international
organisation to develop new
preventative or proactive
management, production or
marketing approaches that
address stakeholder concerns.
Play a leading role in multisector
and sector-wide
responses to the issue by
promoting best practise and
developing standards
Formalised engagement
processes such as industrial
relations with trade unions or
governments.
Leadership company’s
opportunity focused response:
Gain early understanding of
new risks and opportunities,
and practise precaution as
required.
Address the issue early to win
market shares, or competitive
or reputational advantages.
Finding allies for managing
and addressing these impacts
to prevent best practise from
being undercut by companies
that ignore the impacts.
Making sure that everybody
complies with social norms
and commitments.
Stage of
issue maturity
Defensive company’s response
“ It’s not our job to understand
that”
“ It’s not our job to
address that”
“ It’s not our job to
regulate that”
“We’ll do it if we have to”
Novo Nordisk and the growth of diabetes in the developing world
The Danish healthcare company Novo Nordisk’s main business is the prevention and treatment of diabetes. Diabetes is now
recognised as a pandemic, and the current number of people with diabetes, which in 2003 has been estimated to be 194million, is
expected toincrease to 333 million by 2025. Two-thirds of future diabetes cases are expected to occur in the developing world.
Meeting the associated challenges is complicated. Low- and middle-income countries often lack the healthcare information to meet
the needs of a growing number of people with diabetes. Furthermore, a lacking awareness of and education about diabetes is a serious
problem. Therefore, many experts believe that the solution lies in taking an approach that combines increased awareness, education
and prevention with improved access to treatment.
Novo Nordisk works together with governments, patient organisations and other partners to improve diabetes care in poorer countries,
using its expertise and competence in diabetes to address some of the above issues. At the same time, Novo Nordisk is building a
long-term sustainable business advantage as a leader in diabetes care in the developing world, while responding to growing pressure
from society to increase access to medicine in developing countries.
This strategy for improved access to diabetes care has been built on World Health Organisation’s recommendations. Novo Nordisk
supports the building and development of national healthcare strategies and capacities with the National Diabetes Programme, which
is setting up diabetes activities in eight developing or emerging economies. Activities include educating nurses, equipping diabetes
clinics, supporting diabetes patient organisations and working with governments. It has also offered insulin to the public health
systems of the 50 least developed countries, as defi ned by the UN, at prices not to exceed 20% of the average price in the highly
developed countries of North America, Europe and Japan.