Since the Business Roundtable's redefinition of a corporation's purpose five years ago, the landscape of stakeholder capitalism has evolved. CEOs now face the challenge of managing a diverse range of relationships through proactive communication. This article explores the key attributes and strategies that set the world's best CEOs apart in their stakeholder engagement efforts.

Unlock the Power of Stakeholder Engagement for CEOs

Expanded: Embrace your role as the bridge to the outside

In recent years, CEOs worldwide have found themselves on the public stage, expected to have views on various issues. Herbert Hainer, former CEO of Adidas, realized the importance of being on the front line with external stakeholders. To make the most of this platform, CEOs need thorough preparation, reflecting on their leadership journeys and understanding their organizations' unique positions. For example, companies where CEOs listen to frontline employees are 80% more likely to implement better working methods. Innovative leaders also look outside their organizations to understand the competitive landscape and learn from successful communication strategies.

Distinctive: Become the storyteller in chief of a singular, proprietary narrative

The CEO's role is unique in integrating perspectives into a distinctive narrative. Start with the Who and Why - communicate who the CEO is, their leadership journey, and what they aspire to achieve. Personalizing messages enhances their power. For instance, an automotive company CEO shares a story about a car crash to emphasize safety. The Why refers to the organization's purpose and contribution. High-performing companies are twice as likely to define their purpose to resonate with employees. By understanding stakeholder mindsets, CEOs can build more enduring relationships. We often find that CEOs underestimate the importance of the Who and the Why and need to focus on self-reflection.

Growth oriented: Empower a team of ambassadors to articulate the company’s story

While some messages come from the top, CEOs should create a team of leaders to carry and cascade the core narrative. Richard Davis, former CEO of US Bancorp, believes in having equal voices and storytellers on the management team. Communication skills need to be cultivated; organizations that train executives to engage with external stakeholders are more likely to succeed. By embedding communication as an institutional capability, CEOs can speak through their teams. For example, at a technology company, the COO focuses on the What and the When, while the founder and CEO concentrates on the Who and the Why. Investors, customers, and suppliers can also amplify the company's story.

Engaged: Maintain a consistent communication drumbeat, even during crises

CEOs spend 30% of their time with external stakeholders and need to prioritize. A best practice is to have a yearlong view of stakeholder management tasks. When deciding which stakeholders to engage with, strategic questions should be considered. Strong relationships are crucial during crises, and organizations that emphasize social responsibility are more likely to respond effectively. However, taking a public stand comes with risks. Effective CEOs know that galvanizing stakeholders around the organization's mission is essential, even if it seems less urgent. During crises, leaders need to show both strong and empathetic leadership.In the five years since the Business Roundtable's redefinition, stakeholders' voices have become more influential. Organizations and CEOs have the opportunity to deliver value to all stakeholders. An effective communication platform shifts the CEO's posture and approach, enabling them to cocreate a more impactful future with their stakeholders.