Checklist Description
This checklist provides an overview of some of the factors to consider in managing external stakeholders.
Definition
Companies and organizations have to comply with a multitude of rules and regulations concerned with corporate governance. The bigger and more complex a company, the more it will find itself under scrutiny. In this respect, public companies and bodies have even higher standards to comply with.
In order to achieve better supervisory functions of its business, an organization or company can appoint external specialists such as business and financial analysts, marketing specialists, business advisers, and even external directors. Nongovernmental organizations (NGOs), governments, investors, market analysts, suppliers, and customers that have an influence on the business of a company can also form part of its external stakeholder base.
Managing all these connections and influences is no easy task for a company. Its primary role is the good management, growth, and development of its business. In this respect customers and suppliers are a key factor. A successful company will maintain clear and open communication with its customers and suppliers.
In certain cases, when the budget allows a more thorough examination, a company will organize consultations and conferences to which external stakeholders, such as investors and analysts, will be invited and encouraged to contribute by expressing their opinion about the way in which the company is run and developed. Surveys will be carried out which will help the directors of a company or leaders of an organization to better understand their business needs and which areas would benefit most from further development.
Advantages
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Appointing external stakeholders can be more economical for a company than developing its own specialists and spending an important part of the budget in training them.
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Appointing the right external stakeholders will allow an organization or company to conduct a more in-depth analysis of its business models and prospective.
Disadvantages
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External stakeholders can be expensive. Plan your budget accordingly and make sure you negotiate a reasonable and correct fee.
Action Checklist
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If time allows, take a considered approach to finding the right external specialists such as suppliers and finance providers. Obtain as much information from as many sources as you can before appointing them. Consider a selection bidding process and examine carefully each bid before you make a decision.
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Clearly communicate to your specialists what you would like them to do for you. Explain what your business plans are and give them access to your company’s financial figures.
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Take note of the findings of their report and analysis and implement the recommendations to the best of your ability.
Dos and Don’ts
Do
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Appreciate the value of strong communications with external stakeholders. This will help not only with their analysis but later in implementing their findings.
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Make sure they have a real understanding of what you would like them to achieve and contribute to your understanding of your company.
Don’t
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Don’t make a rush decision and appoint external stakeholders if you do not have a real need for them.
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Don’t ignore the need to communicate clearly with them and explain what you would like to achieve from their input.
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Don’t ignore the input from external shareholders as a director, as an experienced external professional could present a valuable perspective on how the company is directed.
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