Bettina Palazzo:
An Introduction to Stakeholder Dialogue
published in:
Manfred Pohl/Nick Tolhurst (eds.): Responsible Business: How to manage a CSR strategy successfully,
Wiley 2010, S.17-42
Please do not cite or copy without permission
Dr. Bettina Palazzo
Rue Beau-Séjour 9bis
CH-1003 Lausanne
bettina@palazzo-palazzo.com
0041-213115521
1
The Stakeholder Scenario
In the seventies the noble price laureate Milton Friedman bluntly stated that the only
social responsibility of business is to increase the profit for its stockholders and
nothing else. In reality things never have been that simple: companies always had to
integrate the interests of other stakeholders than just the stockholders into their
decision-making processes.
It is impossible to increase the profits for stockholders without the acceptance and
cooperation of stakeholders like employees or customers. The legal framework
already forces companies to assume certain responsibility for stakeholders like e.g.
their employees, suppliers and business partners, customers and governments.
Additionally, various economic and ethical reasons can be advanced to support a
stakeholder view of the corporation: Ignoring the concerns of stakeholders might
trigger serious financial or reputational disadvantages and it might violate existing
normative standards, such as those outlined in the UN declaration of human rights.
Consequently, companies cannot afford to disregard their stakeholders due to
economic, legal, and ethical reasons.
Instead of concentrating on the stockholder only, companies have to live up to the
challenge to manage all these different and often contradictory interests.
Box 1
Shareholders
Investors
Customers
Partners
Suppliers
Employees
Competitors
Company
Associations
Unions
Local Community
NGOs
Governement
Society
...
Stakeholder management is no easy task since there is no automatic dominance of
one stakeholder. The values, fears and interests of one reference group might
contradict those of another reference group and it is clear that one can never satisfy
everybody. Stakeholder Management means first and foremost that you will have to
make though choices. There is no standard solution and no magic formula that would
help to determine the priority of stakeholders in a given situation. We do not have
shared and generally accepted standards for dilemma decisions like this.
Furthermore, we are living in a globalized economy where the legal framework and
sanctioning mechanisms are lacking.
It is also controversial how far companies should and can go in their responsibility for
stakeholders. Are they only responsible for their primary stakeholders, i.e. those
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groups and individuals without whose continuing participation the company could not
survive (e.g. employees, stockholders, customers)? Or is stakeholding selflegitimized, i.e. if someone judges himself to be a stakeholder he de facto is one?
 Is the six-year old girl that works under gruesome conditions in the cottons
fields of Uzbekistan of a third tier supplier of Puma a stakeholder or not?
 Are Oil Corporations responsible for the lack of fossil fuels of future
generations?
 Is McDonalds responsible for overweight children?
This stakeholder scenario becomes even more complex if we realise that the
traditional stakeholder model (box 1) is only a simplified model and that reality is
much more complicated: A company’s stakeholder relations are characterized by
coalitions and interdependencies between different stakeholders. Within this
stakeholder network it is impossible to deal with just one stakeholder at a time as the
Nestlé example in box 2 illustrates.
customers
Women’s
groups
Antiglobalization
groups
Trade
organizations
Environmentalists
investors
NGOs
Supply
chain
Labour
groups
Media
Governments
Quelle: Tapscott/Ticoll – The Naked Organization, 2003
Within this stakeholder scenario NGOs play an increasingly important part. The rise
of their importance becomes obvious by the sheer increase of their numbers: In 1985
20,000 international NGOs had been registered by the Union of International
Association whereas in 2005 already 50,000 of these groups were active. In recent
years NGOs have become more professional and internationally organized. They are
highly skilled at mobilizing their constituencies and thanks to the internet, email, and
Skype they can communicate and organize campaigns quickly and with low costs
across the globe.
These groups monitor and criticize corporation on issues like working conditions,
environmental standards, corruption, human rights, consumer protection, and so on.
NGOs request transparency and information on these issues form corporations. In
cases of conflict corporations risk boycotts, becoming the target of a NGO campaign,
and damage to their reputation.
3
In order to respond proactively to this complex and demanding stakeholder scenario
companies have to make clear that they cannot satisfy every interest of every
stakeholder, but that they are dealing responsibly with them. Companies can win the
trust of their stakeholders by informing them about the choices they are confronted
with. The written information found in a CSR report is one first step in this direction,
but direct and reciprocal communication with stakeholder is the more effective
approach.
What are Stakeholder Dialogues and why are they important?
A stakeholder dialogue is a structured discussion between representatives of a
company and representatives of one ore several stakeholder groups. Since within the
stakeholder scenario NGOs play an important part and since they are the most
demanding and challenging group of stakeholders, this article will focus on
stakeholder dialogues between a company and NGOs.
It is the aim of this dialogue to investigate constellations of interests and issues
concerning the company and the stakeholders, exchange opinions, clarify
expectations, enhance mutual understanding, and if possible finding new and better
solutions.
Depending on the issue, the company and its industry, the country, and the goal of
the dialogue there are many different forms of stakeholder dialogues.
One way to differentiate stakeholder dialogues is to distinguish between different
levels of participation.
A first level of dialogue is purely informative communication. It can not even be
considered a true dialogue since information flows only one way. Stakeholders
receive information and the company has full control over the content of information
and the way it is communicated.
The second level is consultative. Here stakeholders are asked for their opinions and
the results of the consultation will be transmitted to corporate decision-makers. To a
limited extend the stakeholders’ input can influence corporate decisions and
strategies. Corresponding tools for this level of stakeholder involvement are e.g.
opinion polls, surveys, interviews, workshops, focus groups, online-dialogues, and
ad-hoc dialogues on specific issues.
The final level is decisional. Since stakeholder are getting involved in corporate
decision making this form of stakeholder dialogue requires the most commitment and
openness for the corporate side, it might be more risky but if managed properly their
long-term effectiveness can be more innovative and sustainable.
The methods and forms of communication corresponding to this level of stakeholder
involvement are e.g. continuous dialogues processes, partnerships and joint projects,
and stakeholder panels.
Stakeholder panels are the most decisional form of stakeholder dialogue so far. With
Stakeholder panels companies institutionalize the dialogue into their corporate
decision making process. This group of independent external experts and NGOs
challenges a corporation’s activities in CSR, critically reviews the CSR report and
turn attention to upcoming issues. In Box 3 an example of such a stakeholder panel
is described:
4
___________________________________________________________
Box 3
The Lafarge stakeholder panel




Active since 2003 this group of 10 persons representing the Group’s main
categories of stakeholders meets twice a year
They challenge Lafarge’s approach to CSR, suggest improvements and form
each year an opinion on Lafarge’s performance and accountability in this field.
The panel makes a collective statement on Lafarge’s sustainability report.
Lafarge publishes this statement without censorship.
Almost all of the members of the executive board participate in one of the two
meetings.
http://www.lafarge.fr/03062008-sustainable_development-term_of_reference-uk.pdf
___________________________________________________________
Beyond the mere exchange of ideas and opinions stakeholder panels can also be
useful to develop or implement corporate CSR activities like e.g.:









Help in defining a companies policy
Help in drawing up a code of conduct
Employee awareness and training in CSR
Assistance in policy implementation
Help in drawing up progress indicators
Support with expertise on the local environment
Monitoring existing indicators and standards
Involvement in the design and implementation of a project
Social Audit
Source: ORSE: Strategic NGO Partnerships Guide, 2006
Box 4 sketches the stakeholder consultations process ABB conducted in order to
collect feedback on the draft of their corporate social policy.
___________________________________________________________
Box 4:
In 2001 ABB published the first version of its corporate social policy. In order to
“road-test” the policy and to collect ideas for its implementation ABB conducted
stakeholder dialogues in 34 countries and involved national and international NGOs,
trade unions, central and local government, academics, the media, religious groups
and business partners.
In these stakeholder dialogues the following questions were discussed:
 Does the social policy cover all the issues it should? What should be added
and which issues are most important?
 How do we put the social policy into practice? How can we measure
compliance and progress?
 Which of the principles should receive the highest priority in implementation?
 Which of the principles are the ones on which ABB is most vulnerable to
criticism?
5
http://www.abb.com/cawp/seitp255/74168f7a72d50e7ec1256c6a00487101.aspx
___________________________________________________________
Other variations of stakeholder dialogue are stakeholder partnerships or multistakeholder partnerships. In stakeholder partnerships companies and a stakeholder
develop and implement a joint project in order to solve a problem or conduct a project
they could not tackle alone. An example: since 1999 Starbucks Coffee partners with
TransFair USA, Fairtrade Labelling Organisation (FLO), and Conservation
International in order to promote the production of fair-trade coffee. Starbucks and
these NGOs join forces to conduct the verification process and help to improve the
farmer’s environmental and agricultural practices.
In multi-stakeholder dialogues, as the name implies, actors form the corporate world,
civil society, government and international organisations join forces to work on an
issue that affects all of them and that has to be approached through cooperation.
Here a corporation that is involved in the dialogue is no longer the focal organisations
but becomes a stakeholder of the initiative. In this case the company enters a
network to solve a problem (inside out approach) and does not involve stakeholders
into its organisation (outside in approach). Prominent examples for multi-stakeholder
initiatives are e.g. the UN Global Compact or the Fair Labor Association.
All these different forms of stakeholder dialogues can have their justifications. It is not
always possible and desirable to engage with all stakeholders in a consultative or
decisional fashion. Especially if a company wants to gather information about the
opinions of large stakeholder groups like customers, or most of the stakeholders in
one country, surveys might be an adequate method. In box 5 the process for
Vodafone’s stakeholder survey in Greece is described:
_________________________________________________________________
Box 5: Vodafone’s Stakeholder Survey in Greece
“Vodafone Greece conducted a survey of 150 stakeholders during 2005. The aim was to assess stakeholder needs and
expectations as well as to get detailed feedback on Vodafone’s performance and future actions.
Participants were selected from 11 key stakeholder groups: academia, business customers, employees, VodafoneShops
franchise, 3rd parties’ associates, government, institutions, business community, journalists, NGOs and suppliers.
The survey was organised by Vodafone Greece’s CR department but all business functions were involved throughout.
For example the procurement department helped to identify and contact suppliers to take part in the survey. This
contributed to the high response rate of 75%.
An independent agency carried out interviews in person using a structured discussion guide, and by phone using a
specific questionnaire. Vodafone Greece provided training to ensure the agency was familiar with the company’s CR
programmes and understood the survey aims. Three employee focus groups were also organised.
The results were analysed in aggregate, by issue and by stakeholder group. For each issue and stakeholder group the
company was able to identify any gaps between stakeholder expectations and actual performance. After the survey the
CR team met with each business function to present the findings and define plans in response to the findings. »
http://www.vodafone.com/etc/medialib/attachments/cr_downloads.Par.0890.File.tmp/VF_CR_Dialogue_1_Stakeholder_engage
ment.pdf
___________________________________________________________________
These classifications of types of stakeholder dialogue are in reality not always clearcut and the boundaries between the different forms often overlap. Consequently, this
guide on how to conduct stakeholder dialogues can only describe some general
principles, project stages, and tools that would be applicable for most stakeholder
dialogues.
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Why should companies get involved in stakeholder dialogues? If a company wants to
open up to or improve its CSR practices it cannot avoid to continuously examine its
stakeholder scenario and the issues and positions that develop in the stakeholder
network. Stakeholder dialogues are the logical step after this form of passive
observation of one’s stakeholder network. Consequently, stakeholder dialogues are
simply part of a companies overall CSR management. And it is important, that these
dialogues are integrated into the general CSR strategy and the general stakeholder
management. Only than stakeholder dialogues can help to create a proactive
relationship between a company and NGOs that goes beyond a defensive and
adverse mindset.
Companies hope to minimize their reputation risks if they learn about controversial
issues at an early stage through stakeholder dialogues. But the opportunities of
stakeholder dialogues (should) go beyond this mere protectionist approach: Getting
involved with independent and critical opinion leaders is also a very effective way to
initiate processes of learning and change within the organisation. In today’s hyperinterdependent world companies need the constant contact with their external
environment in order to be responsive to the needs of consumers and society. Since
almost all organisations are acting within a global context, managers must be able to
communicate effectively across cultural, social, and geographic boundaries.
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Like with any kind of human relationship the opportunities of the involvement with
NGOs can also imply certain risks: Box 5 gives an overview of the risks and
opportunities of stakeholder dialogues for companies and NGOs:
Box 5
For companies
For NGOs
Opportunities
 To signal their willingness to become
involved in CSR practices
 To improve their internal management
practices
 To benefit from expertise on the issues of
CSR and how to tackle them.
 To improve their image within the company
and outside
 To be able to open up to civil society
 To avoid or escape from crisis situations
 To create innovation
 Facilitate community development
 To be able to move their ideas forward
 To encourage companies to adopt a vision of
CSR rather than managing crises one by
one.
 to encourage companies to improve the way
they act in social, societal and/or
environmental contexts.
 To be involved in determining strategy as
well as in its monitoring.
 To develop relationships with other
companies.
 To get more visibility and therefore more
people involved in the cause defended by
the NGO
 To better understand how a company works
and what challenges it faces
 To create innovation
 Raise credibility in establishing real
discussions rather than having a hostile
behaviour
Potential
Risks
 To expose itself to potential attacks
because its activities are under constant
supervision - A partnership is in no way a
kind of insurance against NGO campaigns
 To be victim of information leaks
 To waste time and money if the partnership
does not succeed.
 To put its reputation on the line if it becomes
involved with a company that proves unable
to meet the original expectations
 To compromise its principles and its original
intentions in the name of the partnership,
and hence lose its independence and all
credibility especially when the funding is
predominant
 To be exploited by an unscrupulous
company that sees a way of destabilizing
one of its competitors
 To give rise to differences of opinion within
the NGO
 To replace consultants or employee
representatives on some particular subjects
(discrimination, human rights respect in the
workplace…)
Source: http://www.csreurope.org/data/files/toolbox/Stakeholder_engagement.pdf
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How to conduct a Stakeholder dialogue? A four-phased Process Model
It has become clear so far that there exist many different forms and methods of
stakeholder dialogue. Consequently, the process I will describe here is only a rough
guide that has to be adapted to the specific level of participation, the goals of the
dialogue and the needs, objectives, and resources of the company and of the
stakeholders involved.
The basis of this guideline is a four-phased process model
4. Phase: Follow-up
•
•
•
•
3. Phase: Running the Dialogue
•
•
•
•
•
•
Documentation
Internal and (external)
Communication of results
Actions
Define learning points and modify
design
Evaluation
Start a new cycle
Self-reflection of attitudes
1. Phase: Exploration & Consultation
Dialogue and listening skills
•
•
•
•
•
•
Creating trust
Taking minutes
2. Phase: Preparation
•
•
•
•
•
Identifying issues
Defining goals
Defining level of participation
Identifying potential partners
Selecting partners
Resource planning
Approaching partners
Selecting internal participants
Clarifying goals and resources
Finding neutral facilitators
Joint definition of objectives,
agenda, design, rules, roles and
expectations
Adapted from: BSR Guide and the Collective Leadership Institute: http://www.collectiveleadership.com/123live-userdata/user_data/3829/public/DOKUMENTE/downloads/Phases%20in%20Stakeholder%20dialogues.pdf
1. Phase: Exploration and Consultation
Before entering into a stakeholder dialogue a company has to decide with what
stakeholder(s) it would like to engage with, what issues it would like to discuss, what
issues the potential stakeholders want to discuss, and what the companies and the
NGOs objectives for the dialogue would be.
If companies pursue an instrumental approach in stakeholder management they start
by screening their stakeholder scenario for the NGOs that have the most power and
influence to threaten the company’s reputation. Although this approach is
understandable form a business perspective, it will never achieve a high level of
credibility with stakeholders. Furthermore, it might also be a high risk strategy to
ignore less influential stakeholder, since it is always possible that these groups start
new and successful campaigns that suddenly put a company under pressure.
Therefore, it is recommendable to start the exploration process with the potential
issues the company has to address. There are two elements in the analysis of a
company’s ethical issues. Overall, companies should be aware of the fact that they
are potentially held responsible for all social and environmental problems that might
9
occur along their values chain. As a consequence, corporations have to understand
that chain itself and the various geopolitical contexts in which the steps of their
supply chains are embedded.
First, companies analyse their ethical issues by deconstructing their value chain:
 How are the working and production conditions at the suppliers?
 What are the social and environmental impact of the production process and
the products and services?
The following chart gives an example for the analysis of the value chain in the food
industry:
Value-Chain Analysis of the Food Industry
Pesticides
Pollution
Labor issues
Traceability
Input
Industry
Pollution – (chemicals/pesticides)
Soil degradation
Long term raw material supply
Human rights
Poverty
Child labor
Worker health and safety
Farmer
Trade
Processor
Food
Industry
Restaurants
Retailer
Traceability
Obesity
Nutrition/Health
Allergies
Responsible marketing
Alcohol abuse
Advertising to children
Packaging Waste
Recycling
Consumer
Catering
Sustainable agriculture
Prices/Farmers income
Animal welfare
Water security
Sustainable aquaculture
Fair trade
Slavery
Traceability
Human rights
Work conditions
Corruption/bribery
Fair trade
Animal welfare
Eco-efficiency/Energy
Water security
Food safety/traceability/
Nutrition – food quality
Emissions (air and water)
Packaging waste /Recycling
Health and safety of employees
Diversity in the workplace
Corruption/bribery
Quality
Food safety
/traceability
Packaging waste
Recycling
Transport (‘food miles’)
source: http://ec.europa.eu/enterprise/csr/documents/business_case/somers.pdf
Second, a company should screen the geopolitical contexts of the countries where it
is active:
 Is this country known for human rights violations?
 Do the operations involve contacts with representatives of a repressive
regime?
 How stable is the political and economic context in this country? Etc.
In order to update the required geopolitical and supply chain knowledge, a company
should try to establish systematic communication links with stakeholders. A very
promising tool to do so is a stakeholder panel.
Such supply chain analysis along geopolitical contexts can also be completed and
informed by opinion polls, press reviews, internet research, etc.
The next step after this screening and tracking of possible hot issues is to identify the
issues that are legitimate and deserve more thorough attention. One way to analyze
the legitimacy of issues is to examine if the related corporate behavior is in conflict
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with principles of the UN Global Compact, ILO conventions, or other corporate or
industry standards that the company has committed to.
After the legitimate issues have been defined, the stakeholders corresponding to
these issues have to be found and companies have to decide on what level of
participation and with what form of communication they want to engage. If a
stakeholder panel is already established, understanding the legitimacy of emerging
issues should be decided in a dialogue. Since this article focuses on stakeholder
dialogues, i.e. the consultative level, I will not elaborate on the process of formulating
an overall stakeholder participation strategy. But basically a company could work with
the following matrix to plan the different communications strategies for each
stakeholder:
Stakeholder
Xx
yy
zz
ww
Issue
Informative
Info event
Consultative
Decisional
Focus group
Stakeholder
dialogues
Partnership
Often there are several NGOs that are concerned by an issue and could be
appropriate partners for a dialogue.
Before selecting an NGO with whom one wants to enter into a dialogue process,
companies must define the corporate goals they are aiming to pursue with this
engagement. If they know exactly what their needs and expectations are, it is much
easier to select the NGO that can help the company achieve that goal. Of course, in
a lot of cases, it is the NGO that chooses the company by targeting it with its critique.
In this case, not turning this NGO into a dialogue partner and ignoring their concern
would be a high risk strategy. If they can make a choice, for instance if they are
dealing with an issue in a proactive way, companies have to decide whether they
want to cooperate with an international or a local NGO - or with a combination of
global/local partners. This decision depends on the issue and its geographical
context. International NGOs have more experience in cooperating with the private
sector, whereas local NGOs have more knowledge of the local situation and may
help to bridge cultural gaps. Both local and international civil society actors can be
important for a successful dialogue project.
If the company is clear about its needs, goals, and expectations it can start gathering
information on potential partner NGOs.
There are numerous sources of information in finding the right NGO for the issue that
the company wants to tackle:
 Within the company various departments (PR, CSR, marketing etc.) are
already in contact with NGOs.
 Other companies might share their experience with their stakeholder
engagements.
 International organisations are involved with NGOs and can provide fairly
neutral information.
 Further sources of information and advice are among others government
agencies, unions, universities, foundations, religious organisations, the
internet, media and publications, and business associations.
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After an initial identification of potential dialogue partners, companies have to do their
homework and conduct some due diligence on their NGO shortlist, i.e. read the
NGOs publications, annual reports, website, media reviews of the NGO etc.
Companies have to know:
 What the NGO does?
In what issues are they involved? Are they an advocacy, humanitarian,
development organisation?
 What is the NGO’s vision and mission?
Dialogues can only work if each party can at least respect the vision and
mission of the other partner.
 Whom does the NGO represent?
 What is the NGO’s reputation among stakeholders?
 What is the expertise of NGO on the issue to be tackled?
 What is the NGOs attitude towards corporate world ?
 Is the NGO known for a history of dialogues with other corporations that have
been conducted in good faith?
 Does the NGO have the internal capacity to commit to the time, resources,
and personnel needed for a dialogue?
 How is the level of legitimacy and credibility of the NGO? How advanced is its
financial transparency and internal governance? (source: BSR Guide)
It is also useful for companies to know about the selection criteria of NGOs. Some
NGOs work with exclusion criteria e.g. no dialogues with tobacco companies. The
WWF has established guidelines for partnerships with companies (mutual respect,
transparency, right to criticize) and only works with one company within a given
sector.
In most of the times companies already have some sort of relationship with the
stakeholder group or NGO they want to start a dialogue with. Here it is helpful to
analyze dynamics of this relationship so far. Is the relationship of NGO and the
company characterized by a gridlock of corporate moves and NGO opposition? Who
is in contact with whom inside this NGO? How strong is the opposition force and how
big are the chances in making the relationship more cooperative? Are there
organisations that could mediate the relationship?
This process of mapping issues and potential dialogue partners is already in itself a
very valuable exercise and is the basis of the whole stakeholder dialogue process.
It provides the clearity that is needed to effectively plan the resources (staff time,
travel costs, accommodations, external consultants’ fees, supplies etc.) that will be
needed for the dialogue.
2. Phase: Preparation
Once the partners for the stakeholder dialogue are selected, the dialogue
representatives of both sides can be identified.
Corporate representatives should come from departments that correspond to the
issues to be discussed and there should be at least one person who is responsible
for the management of the whole process. A certain level of top management
participation will be necessary to signal commitment to the partner and to sell the
dialogue internally.
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It is important to also verify that the NGO representatives have the authority to make
agreements on behalf of their organisation and that they match the level and the
areas of expertise of the corporate participants.
The careful selection of these persons cannot be overestimated since at the end of
the day the success of stakeholder dialogues depend a lot from interpersonal
dynamics.
Consequently, it is vital to get to know each other better before the initiation of a
more serious commitment. Therefore, visiting each others offices during the
preparatory phase of the stakeholder dialogue can be very useful. In that way both
parties have entered the “enemy’s territory” and get a feeling for their way of working
and dispel stereotypes.
Both parties should fully understand what the needs, interests, expectations, and
motives of their partners are to enter in the dialogue. On this basis both parties can
jointly define the objectives, design, agenda, and ground rules of the dialogue.
Mutually agreed goals provide a basis for action and give guidance during the
process. These goals have to be clear to all participants and as specific as possible
since fuzzy goals easily lead to confusion and dispersion of energy. Furthermore,
they are necessary as a frame of reference when evaluating the dialogue.
Nevertheless, having clear objectives should not mean that the results of the
dialogue are all set at the beginning. Are certain openness and ambiguity is
indispensible in order to be able to come up with creative new ideas and being able
to adebt to new information or changing situations.
The next logical step is the thorough preparation of the first dialogue event. The
“mantra” to keep in mind, when organizing such a event is “Will this enhance an open
and creative dialogue atmosphere of trust?”.
Principally organizers have to decide on
 the location of the event
It is clear that meeting at a neutral place helps to avoid power imbalance and
enhances openmindedness of participants since they distance themselves
form their everday working contexts. It is also clear that one should not meet
for talks on child labor and poverty in five-star hotels.
 the preparation for the participants
Should particpants recieve a information package e.g. reading material for the
event? Do the internal participants need extra training in facilitation, CSR, or
on the issue to be tackeled?
 the design of the event
o What kind of facilitation techniques should be used (e.g. flip-charts,
meta-plan, brain storming, scenario workshops, open space, and so
on)?
o Is there enough time for informal socializing during breaks?
o The atmosphere of dialogue is influenced by simple things like seating
arrangements. If e.g. corporate representatives are seated in rows and
are listening to a defilé of serial monologues by stakeholder
representatives, the development of an open and dialogical dynamic is
rather unlikely. If these dialogues resemble court hearings corporate
representatives can easliy feel attacked and automatically become
defensive.
 the selection of a neutral facilitator
Having one neutral facilitator (or several facilitators) is very important to avoid
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conflict, misunderstanding, and ineffecitve communication. When choosing a
facilitator the following questions should be considered:
o Does she enjoy the trust of all participants?
o Will she be competent to enhance the creativity of the group, deal with
potential conflict, and avoid premature decision-making?
o Are the facilitators committed, flexible, responsive, balancing, inclusive,
encouraging, respectful, neutral, problem-solving oriented, disciplined,
culturally sensitive, capable of meta-communication and comfortable
with their role?
o How can the results of the dialogue be documented and measured.
Rapporteurs that will take minutes should be identified. Since they will
document the meeting’s outcome these persones should be acceptable
to both parties. (source: Hemmati, M.: Multi-stakeholder Processes for
Governance and Sustainability, 2002 Earthscan London)

Ground rules
Typically, confidentiallity and costs are two key concerns that need to be
covered by ground rules
o Confidentiality and disclosure
All participants must understand that some of the information discussed
during the dialoge are sensitive and have to be kept confidential. The
parties have to agree up front when, how, to whom, and by whom
information about the dialogue will disclosed.
o Costs
In order to avoid misunderstandings the way cost and reimbursements
should be handled have to be clarified at the beginning. This is a sensitive
issue since NGOs have limited resources, but at the same time they are
concerned to loose their independence if they accept corporate funds.
3. Phase: Running Dialogue
It is clear that stakeholder dialogues are not supposed to be nice and comfortable
meetings. Distrust on both sides is normal at the beginning and should not be taken
personal.
There has to be some fruitful tension and all parties should be ready to take some
risks when they participate. But the risks and opportunities should be acceptable for
both parties. Both parties have to focus on common interests instead of oppositing
positions. NGOs should stay flexible and try to understand the motives and pressures
of companies. On the other side also companies should try to expand their corporate
mind sets.
Manager are often not used to talk with critical cicil society representatives. Territorial
fears are getting triggered on both sides: Companies have to open up their
bounderies and NGOs have to venture into the “cave of the lion”.
It is crucial that coporate representatives avoid giving the impression that they are
conducting the dialogue out of marketing or image reasons. Therefore, e.g. the
information they provide to the NGO partner should be as neutral as possible and
should not be influenced by a hidden corporate agenda or spin.
There are differences in language patterns between the corporate world and civil
society organisations: People in corporations operate mostly in a mode of power
language (decisions, effectiveness, interests, bargaining etc.) whereas
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representatives of NGOs use more affective and identity-driven language (concern
for people, values, being on a mission, higher order purposes). These different
language patterns generate potential for profound misunderstandings.
Consequently, participants should try to talk simply, avoid jargon, and make their
background assumption explicit. If they express their opinions or make
interpretations, it is important to explain the thinking behind their statements.
Even more important than this way of expressing their views, are the participants’
listening skills in a stakeholder dialogue. Only if we really listen to people they will be
able to speak authentically. Some ideas for developing listening skills:
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Cultivate your will to really listen.
Even if you strongly disagree with your partners view, look for the one grain of
truth that you can find.
Ask your partner for her assumptions that have led her to see things that way.
During listening always keep the question “What else is important?” in your
mind. Ask this question or versions of it until everything is said and the
situation or context you partner describes is clear like a film in your mind.
Verify if the film in your mind corresponds correctly with the film in your
partners mind.
It is not always possible that the participants, both corporate and NGO, maintain the
necessary self-reflection to be aware of their respective mindsets, language patterns,
assumptions, and prejudges. That is one reason why a skilled facilitator is so
important. He or she must constantly observe if different and unconscious
assumptions get in the way of mutual understanding and he or she has to make
these hidden assumptions explicit to everybody. Only a neutral facilitator can help the
participants to suspend their judgements of each other that block the process of
mutual learning. She helps participants to understand that their way of seeing the
world is not necessarily the only right one and that different perspective can bring
value.
Furthermore, the facilitator has to play time-keeper and be aware of dysfunctional
communications like domination by certain participants, blocked communication,
intimidation, gossiping, manipulation etc.
If properly prepared and conducted the dialogue can become a process of thinking
together that collects multiple perspectives and creates an understanding for the
whole.
4. Phase: Follow-up
Like in any project management the follow-up phase is the less popular one since it
involves a lot of work and energy, when everybody is exausted from the process.
Follow-up tasks are often time-consuming, administrative, and not very glamorous.
Nevertheless, if the results of the dialogue are not proficiently managed the whole
process looses value, legitimacy, and thous impact.
Documentation
One first step in this follow-up process is the finalisation of the dialogue’s
documentation. Minutes and reporting should done in a neutral fashion. They should
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reflect the breadth and depth of discussions and have to be acceptable to all
participants.
External Communication of Results
There should be one person each that is responsible for the external communication
on the stakeholder dialogue and its results at the company and at the NGO. That way
conflicting information is avoided and both organisations provide consistent
information. In general public communication about the project should be kept on a
low level in oder to avoid the impression of PR motives on the corporate side and the
impression of loosing ones independence on the side of the NGO.
Internal Communication of Results
More important than the external communication is the internal communcation on the
stakeholder dialogue. The project coordinators have to decide what persons within
the organisation need information about the dialogue and how these target groups
should be informed.
Actions
To show their NGO partners that their engagement goes beyond the exchange of
words, of course, also actions should follow. If the dialogue does not have any
consequences on corporate behavior the motivation of the NGOs to enter in another
cycle of talks will be destroid.
However, due to complex corporate decision making-making procudures and timelag, it is not always easy to make a direct link between a specific dialogue event and
a company decision or action.
Here corporate dialogue managers have to keep track in order to be able to show to
their NGO partners, how their cooperation has influenced corporate policies,
strategy, and practice. One adequate way to communicate these connections is the
company’s CSR website and the CSR report.
Evaluation
The results of the dialoge have to be evaluated against the initial goals and
expectations. One general performance indicator for the success of a stakeholder
dialoge is its impact on the issue tackeled in the dialoge. An example: a company
wants to find new ways to recycle its wast and thanks to the stakeholder dialogue
they come up with an innovative solution that reduces wast to a certain percentage.
In cases like this the impact on the issue is even quantifyable.
Other performance indicators are the value and benefits that the dialogue added for
the organisations involved. These results are often more qualitative than quantitiave.
The coporate managers involved might have improved their understanding of the
issue, expanded their communication skills, and enhanced their ability for “out-of-the
box-thinking”. The NGO participants might have gained a new understanding for
corporate decision making-processes and dispeled their baises against managers.
The NGO-company relationship might get transformed from an adversarial one to a
more cooperative one.
To order to analyze the stakeholder dialogues results it is necessary to get formel
feedback from all participants. Since the assessment of the dialogue as such may be
different than the assessment of the actual results both topics have to evaluated
separately.
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When evaluating the stakeholder dialogue in itsself, it is helpful to identify learning
points that can be used to modify the design for future dialogue events and
processes.
Start a new cycle
A first stakeholder dialogue event should not stay a singel on-off project, but should
be the initiation of a continuous and long-term relationship. The trust built in a first
dialogue as to be maintained. Here it is vital to ensure the continuity of the corporate
representatives involved in the dialogue. Trust is mostly created by individuals and if
the individuals that interact with NGOs constantly change this interpersonal basis is
easily distroyed. Of course, staff turn-over can not be avoided but it can be managed
by appointing corporate dialogue managers that are likely to stay longer with the
company and by overlapping replacement managers and providing new dialogue
members with adequate preparatory material.
Conducting stakeholder dialogues is a complex and challenging task that requires
diligent project management. Usually that is something companies are already good
at. The deeper challenge of stakeholder dialogue is actually that companies that
open up to external dialogue cannot keep up an internal monological culture of
command and control.
If companies want to truly engage in transformative stakeholder dialogues they also
have to be ready to transcend their short-term thinking, because the results of
stakeholder dialogues are long-term and stakeholder management has to be
conducted with a long-term attitude.
Furthermore, companies have to broaden their narrow focus on the finishing line,
since this inhibits true dialogue and openness to new perspectives and unfamiliar
approaches.
In summary, stakeholder dialogues can help companies to stop behaving like
blinkered horses in a race for profit, but look around and join forces for more
sustainable success.
Further Reading:
Business for Social Responsibility's (BSR) Guide to Engaging with NGOs, 2001
Hemmati, M.: Multi-stakeholder Processes for Governance and Sustainability, 2002
Earthscan London
Kaptein M.; Van Tulder R.: Toward Effective Stakeholder Dialogue, in: Business and
Society Review, Volume 108, Number 2, June 2003, pp. 203-224
Künkel, Petra: Making use of dialogic change models in partnership brokering,
http://www.collectiveleadership.com/123live-userdata/user_data/3829/public/DOKUMENTE/downloads/dialogic%20approach%2
0to%20multi-sector-partnerships.pdf
Leitschuh-Fecht, Heike: Wie wird ein Stakeholder-Dialog erfolgreich? 10 „Dos
and Donts“, http://www.fairwirtschaften.de/downloads/dosdonts.pdf
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Nick, Alexander: Levels of Stakeholder Dialogue, IÖW Summer Academy
Sustainable Corporate Governance, Institute for Organisational Communication
Potsdam, 28 September 2004
ORSE: Strategic NGO Partnerships Guide, 2006
http://www.orse.org/site2/maj/phototheque/photos/docs_an/practical_guide_1.pdf
ORSE / CSR EUROPE: Proactive Stakeholder Engagement. Practical Guide for
companies and stakeholders, DECEMBER 2008
http://www.csreurope.org/data/files/toolbox/Stakeholder_engagement.pdf
Tholke, Mark: Collaboration for a Change. A Practitioners Guide to Environmental
Nonprofit-Industry Partnerships, Corporate Environmental Management Program
Michigan Business School and School of Natural Resources & Environment,
September 2003
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