Improving stakeholder reporting: 7 practical tips to follow
Productive stakeholder engagement is vital for companies’ growth. Not only does it help to use stakeholders’ vision to set relevant goals in a corporate strategy, but it also keeps stakeholders motivated and actively involved in the company’s operations.
Stakeholders reporting is one of the ways to improve stakeholder involvement. This article discusses the main benefits and challenges of reporting and gives seven practical tips to improve reporting to a stakeholder.
What is stakeholder reporting?
Quality reporting should be an essential part of each board development plan. Stakeholder reports allow for effective board governance and stakeholder engagement.
By creating stakeholder reports, a board establishes productive communication with stakeholders, keeping them on track with the success metrics and current performance of the company. Additionally, reporting after a consultation allows stakeholders to be aware of what measures are taken by the board to address the discussed issues.
The primary objectives of the stakeholder reporting process are transparency, accountability, and trust. Here are some common benefits of reporting to a stakeholder:
- It allows for bringing transparency into the stakeholder/board relationships.
- It provides accountability that helps to keep all the data, metrics, and strategy on track.
- It helps to build trust between stakeholders and the board, which expectedly results in effective collaboration and the progress of an organization.
Note: The primary stakeholders in a corporation are the company’s investors, employees, customers, and suppliers.
Why stakeholder reporting matters
One of the not-so-obvious advantages of reporting to stakeholders is the opportunity to clearly identify the current performance of the company and the next steps to be taken to complete the required tasks. As a result, it encourages commitment and helps to establish effective collaboration between stakeholders and the board.
The list of other benefits that consistent reporting to stakeholders brings include:
- Improving relationships between the stakeholders and the board
- Building a collaborative atmosphere of trust, accountability, and transparency
- Engaging internal stakeholders (for example, employees)
- Gaining stakeholders’ support in the business growth and development
- Encouraging environmentally and socially responsible behavior (which potentially attracts investors)
- Motivating further stakeholder involvement
- Supporting brand reputation
- Improving corporate governance
Types of stakeholder reports
Reporting to stakeholders can have many objectives and be of various types. Largely, all stakeholder reports can be divided into financial, operational, strategic, compliance, and sustainability reports.
However, reporting to a stakeholder group can also take the following forms:
- Reporting for project-affected stakeholders. It implies reporting on the current progress that helps to keep impacted stakeholders on track regarding what measures are done and what is planned to be done to reach the specified scope of goals.
- Internal reporting. It involves reporting to internal stakeholders (e.g., the management team) on the ongoing stakeholder consultation activities and their results.
- Consultation research reporting. This type of reporting implies direct reporting to stakeholders after discussing results so they are aware of the current findings.
- Corporate reporting. As a part of board governance models, stakeholder reports can be included in corporate governance, sustainability, or annual reports.
- Reporting on the stakeholder involvement. This type implies reporting directly to stakeholders regarding their engagement with the organization or project, thus motivating further active involvement.
What is a stakeholder reporting challenge?
Reporting to a stakeholder can come with certain challenges, such as those described below:
- Identifying relevant stakeholders for reporting. It’s essential to determine what type of stakeholder you need to report to. It can be internal or external, direct or indirect, primary or secondary. It’s recommended to perform a thorough stakeholder analysis, which helps to identify relevant stakeholders for reporting.
- Building trust and transparency. Though trust and transparency are the main benefits of reporting to stakeholders, it still might be difficult to establish them. Typical stakeholder reporting needs may be different, which, obviously, requires different approaches.
- Evaluating findings. Presenting findings to stakeholders isn’t enough — it’s essential to evaluate them correctly to be able to change or improve operations based on them.
- Complying with standards. There are a number of international reporting standards to follow when creating a report. Some standards include Global Reporting Initiative (GRI), UN Global Impact, SA 1000, and OECD Guidelines for Multinational Enterprises.
7 tips to improve stakeholders reporting
Below is a list of seven easy tips to follow to make reporting easier and more efficient.
1. Clearly define reporting requirements
The success of reporting greatly depends on its initial stage — identification of the relevant stakeholders, board reporting requirements, and the type of the report. It also involves the type of information you should include in a report.
For example, companies that comply with the UN Global Impact standards are committed to ensuring human rights protection. It means they must regularly measure their progress on sustainable development goals and report on it.
2. Regularly update records
For presenting a quality and effective report, accurate information consolidated from the legacy systems is required. That’s why updating all the records is essential. It also implies updating the list of shareholders’ contact details so that the report will always reach its addressee.
3. Provide only valid information
When reporting to a stakeholder, it’s important to include only relevant information in the report. Make sure that the contents of the report are understandable and give a stakeholder an extensive overview of the project, organization, and current engagement.
4. Track your commitments
When making a commitment to a stakeholder group, make sure to track it. Also, regularly communicate the progress to stakeholders, so they know you’re actively involved and proceeding with it.
5. Enable cooperation
The value of two-way communication is hard to overestimate in the corporate world. However, it’s often neglected. When providing a report, ensure that it’s not one-sided communication. Therefore, make sure stakeholders have your contact (email, for example) or can arrange a meeting to discuss the report and solutions to make.
6. Translate reports if needed
Though English is an international language, sometimes it’s better to translate a report into a particular stakeholder’s local language. Based on our experience, this way, you demonstrate an individual approach and ensure 100% understanding on the stakeholder’s side.
7. Evaluate the results
A reporting process won’t be successful without a thorough outcomes’ evaluation. This includes the evaluation of the findings and general engagement, as well as the assessment of the metrics and overall reporting format. Ask a stakeholder for feedback and improve reporting if needed.
Stakeholder reporting template
A report to a stakeholder can be different depending on its type, goals, and expected outcomes.
Below are a few examples of how a report to a stakeholder can look:
Trends in reporting to stakeholders in 2023
Based on our observations, sustainability reporting and digitalization are among the main trends in reporting to stakeholders in 2023.
- Sustainability is becoming a core focus for many international companies. For example, Apple has committed to becoming 100% carbon-neutral by 2030 and 66% of global customers admit they would spend more for a particular product if it was produced by a sustainable brand.
- Digital reporting with a sufficient number of visuals and a possibility for further collaboration is definitely among the main trends. This is made possible thanks to the number of board portals and virtual data room solutions that allow for secure data sharing and storing and effective collaboration between interested parties.
Bottom line
Reporting to a stakeholder allows for effective corporate governance and encourages stakeholders’ active involvement. Regular reporting helps to build an atmosphere of trust, accountability, and transparency between stakeholders and the board.
For a successful report, you should clearly identify why and to whom you’re reporting, regularly update your records, track commitments, and timely evaluate the findings.
Try to automate the reporting process with the iDeals board portal!