Evidence-based advocacy and
strong leadership can enable a
positive response to mounting
stakeholder scrutiny in the wake
of the pandemic.
Even before the pandemic, organisations faced intensifying scrutiny. FTI’s 2020 Resilience BarometerTM shows that global executives already believed that customers, governments, regulators and investors are the stakeholders with the most impact on their businesses’ performance and strategic direction.
of business leaders surveyed were not involved in the legal processes at their organisation (compared to just 28% for operations and 29% for strategy)
More than
companies have experienced a leak of internal sensitive communications in the last 12 months
of companies are proactively mitigating the risks of political disruptions or abrupt policy changes
The pandemic has accelerated this trend, with government scrutiny particularly likely to increase. In a heavily politicised environment, any form of state investment in the private sector, from relief funding to equity holdings, comes with high expectations, strict conditions, and risks. So do other forms of support, such as temporary relaxation of competition and anti-trust rules, in a context of increased trade tensions.
These businesses also face the “court of public opinion”. Active engagement by employees and the broader public is generally on the rise: FTI’s Anatomy of a Crisis IV found 62% of workers calling for the media to scrutinize business more closely if a second COVID-19 spike occurs.
As stakeholders, governments and civil society will expect companies to demonstrate strong governance and contribute meaningfully and effectively to environmental or societal goals in return, illustrating the growing importance of ESG performance.
Facing pressure from all sides, companies must reinforce their business and advocacy strategies by basing all decisions on hard evidence. Advanced data, intelligence gathering, and analysis should be used to gauge positioning, assess stakeholder sentiment, and measure the impact of engagement. Such assessments must be undertaken holistically with respect to jurisdictions and geographies, ensuring strategies remain effective across borders.
Senior management communication is also pivotal – in particular, an authentic, constructive dialogue between CEOs and stakeholders to affirm the business’s role and purpose. These discussions promote financial strength in addition to goodwill: vocal CEOs have generated US$260bn additional shareholder value since the start of the pandemic.
A resilient business must engage proactively with complex stakeholder networks, transforming external scrutiny into a source of strength.
Perspectives
