CSR Guidelines for the Financial Sector - page 25

and citizens
Trade unions
Joint venture
partners and
Investors and
Stakeholder engagement can serve to inform and enhance an organization’s riskmanagement, strengthens
long-term sustainability of organizations, and enhances trust and reputation among stakeholders.
In any operational environment, stakeholders impact organizations in a variety of ways. Theymay have economic,
technological, political, social or evenmanagerial effects on an organization. Therefore, engagement is an
important part not just of maintaining operations but also of identifying potential opportunities and risks. Such
proactive identification of opportunities and risks feeds into strategicmanagement and sustainable growth.
It is critical to the success of CSR that an organization considers a stakeholder-consciousmodel with effective
engagement. Effective engagement is characterized by two-way communication – a dialogue – not marketing,
advertising or any form of one-way communication that many organizationsmisinterpret as engagement. It is
important to not only hear what stakeholders have to say but to actually actively listen towhat they are saying and
sincerely consider their input and accordingly respond to their concerns.
Definition of Stakeholders
The term “stakeholder” has been used since at least the 1930’s, when aHarvard Law Professor, E. MerrickDodd,
publicly supported the identification of fourmajor groups of business stakeholders: shareowners, employees,
customers and the general public (Preston& Sapienza). A 1963 internal memo at the Stanford Research Institute
used the term to refer to “those
groups without whose support the
organizationwould cease to exist.”
By definition, stakeholders are all
persons who are affected by ormay
affect the operations of an
Stakeholders include employees,
local communities, local elected
officials, regulatory agencies,
customers, suppliers, financiers,
shareowners, and non-governmental
Each organization has a different set
of stakeholders; also, in larger
organizations, different departments
may have and deal with different
stakeholder groups.
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