CSR and Stakeholders: definitions, maps, configurations and strategies

samedi 13 février 2016
111
CORPORATE SOCIAL RESPONSIBILITY
& BUSINESS ETHICS
Session 2 : The company
and the stakeholders
François MANGIN
2015-2016

222
The company and
the stakeholders

333
Session 2 Learning objectives
By the end of the session, each student is able to:
 Explain what a stakeholder is and the role stakeholders play in the
Sustainable Development agenda;
 In a given situation, identify, qualify and map stakeholders
 Present and explain the configurations of stakeholder management a
company can engage in, and list the specific stakes of each one,
 Present and explain the method and the tools for engaging stakeholders
in strategy design and in the projects to be implemented by the
company;
 Explain and use the concepts that allow to identify the way a
controversial situation is structured, and to predict its developments;
 Present the stakes of stakeholder engagement in the public decision-
making processes ;
 Explain and identify the main techniques of lobbying that stakeholders
use, as well as the way for a more responsible lobbying;
 Critically assess companies’ stakeholder engagement and lobbying
practices.

444
Session 2 outline
1. Stakeholders: concept, definition et roles
2. The company and its stakeholders
3. Dealing with the stakeholders: configurations, strategies
and tools
– Designing the strategy
– Implementing a project
– Facing a controversy
4. The State and its stakeholders:
– Public decision-making and private interests
– Lobbying: stakeholders in action

555
1
Stakeholders
Concept,
Definition & Roles

666
Stakeholder
Person, group, organization:
• Whose interests are
impacted by the operations or
by a project
• That has an influence on the
operations or on the project

777
Impacts & reactions
Operations
Project
Impacts
Affected
interests
Reactions

888
Activity or Project: X
Stakeholder Interests
Impacts of
the activity or project
Stance /
activity or
projectPositive Negative
Vedanta
Orissa State
…
Analysis grid

999
Roles
of the stakeholders
• Representing interests
• Increasing the perception and understanding of
the impact of the operations or of the project
 Adding decision criteria
 Improving decisions

101010
Interests
& representation
• Non represented interests
– Shareholders
– Suppliers
• Collectively represented interests
– « Ad-hoc » associations
– Consumers associations, NGOs…
– Business associations, unions…
• Commons (e.g.: biodiversity)
– NGOs…
• Who represents the general interest ? (to be
continued…)

111111
Areas of action
for stakeholders
• Entering into dialogue with:
– Public bodies
– Companies
• Seeking information for assessing impacts
• Advocating and creating public awareness
– Campaigns
– Involvement in controversies
• Legal representation and lawsuit
– Standing (locus standi)
– Class action
– Implementing soft law through lawsuits

121212
Class action
A procedural device that permits:
• one or more plaintiffs to file and
prosecute a lawsuit on behalf of a
larger group, or "class"
• to claim damages that will be paid to
each member of the class, even if
they were not personally party to the
proceedings.

131313
Synthesis:
• A stakeholder represents an interest that is affected
by the operations or a project and/or can influence it.
• Stakeholder engagement is a key component of SD
and CSR by giving to the public and corporate
decision-makers the means to take more sustainable
and responsible decisions.
• An important stake: giving voice (including by lawsuit)
to some up-to-now neglected stakeholders.

141414
2
The company and
its stakeholders

151515
One concept, 3 perspectives
Dealing
with
demands
• The manager must
deal with other
demands than
those of
shareholders
Procuring
Resources
• The company
depends of
external resources
to pursue its
strategy
Contributing
to the social
good
• The company must
take into account its
externalities

161616
Typical stakeholders
Company
Shareholders
External
auditors
Standards
Setters
Banks &
Creditors
Investors
Prescriptors
Customers
Users
Competitors
Suppliers
Sub-
contractors
Funders
Experts
Medias &
social
networks
Lobbies
Working
population
Employees
Unions
Local
authorities
Side
residents
Legislators
Regulatory
bodies
Courts
Citizens

171717
3 major categories
Stakeholders to whom
the company has legal,
financial or operational
responsibilities
Stakeholders who
can directly or
indirectly influence
the company’s
decisions and
performance
Stakeholders who
are affected by the
company’s decisions
and activities

181818

191919
Closeness & Frequency
• Members of the
company
• Employees
• Managers
• Works Council,
Health & Safety
Committee
Internal
Stakehold.
Close and frequent
relationships:
• Customers
• Suppliers…
External
Stakehold.
Infrequent and loose
relationships
• Nearby residents
• Local government
• Medias
Distant
Stakehold.

202020
Company’s dependency
Secondary
Stakeholder
Low or moderate dependency
NGOs, consumers associations, communities, government,
medias…
Primary
Stakeholder
Critical dependency
Shareholders, managers, employees, suppliers and customers,
et clients, providers of licenses to operate, creditors…

212121
Stakeholders

222222
Engaging
stakeholders
• Who? – stakeholder selection
• Why? – objectives of the relationship
• How? – means and medias
• Which level of involvement in the decision-
making process?
• Which level of influence on the decisions?

232323
Stakeholder engagement
Employés
•Dialogue avec
Rep. du
personnel
•Forums libre
expression
•Enquêtes de
satisfaction
•Formation
Patients
•Panels de
patients
•Panels d’assoc.
de patients
Prof. de santé
•Groupes de
travail
•Réunions
scientifiques
•Études cliniques
•Enquêtes de
satisfaction
Régulateurs
•Études cliniques
•Négociation des
prix et des
remboursements
Fournisseurs
•Sensibilisation
aux droits de
l’homme,
conditions de
travail et
environnement
•Évaluation
Concurrents
•Participation aux
instances
professionnelles
du secteur
Agences de
notation
•Réponses aux
enquêtes et aux
questions
Investisseurs
•Réunions
d’analystes
•Réponse aux
questionnaires
•Roadshows
•Interactions avec
agences proxy et
agences
d’évaluation ESG
Actionnaires
individuels
•Conseil
consultatif
•Réunions
spécifiques (F)
•Assemblée
générale
•Salons (F, USA)
ONG
•Initiatives mixtes
•Réponse aux
questionnaires
•Participation à
des forums
•Enquêtes de
satisfaction
Citoyens
•Forums de
consultation
Communautés
locales
•Panels de
riverains
•Dialogue avec
autorités locales

242424
Types of relationship
Information
Consultation
Dialogue
Negotiation
Association
Integration
Mandatory Further Readings on Moodle
Critical Friends: Engaging stakeholders

252525

262626
Compliance or Commitment?
Rational Commitment
Regular and deep relationships
with internal and external
stakeholders
Dialogue with critical
stakeholders
Radical activism
Employees are members
of the Board
Partnerships with some
critical stakeholders
Social Mimetism
Infrequent consultation with
some non critical external
stakeholders
Legal Compliance
Information of stakeholders to
whom the company has legal,
financial or operational
responsibilities
Risk
management
Commitment

272727
Synthesis:
• Stakeholders engagement is a fundamental part
of CSR/SD, to prevent externalities and making
better decisions.
• Beyond the principle of “dialogue”, the way
stakeholder engagement is implemented is a
key indicator of a strong and genuine
commitment in CSR/SD.

282828
3
Contexts of
interaction

292929
3 configurations

303030
3.1
Stakeholders and the
design of the strategy

313131
Aligning CSR strategy with the strategy
Stakes and
Impacts
Assessment
Choice of areas
for action
Projects
Objectives
Indicators
Implementation
Control and
Outcomes’
Measurement
Communication
and CSR
Reporting
Stake-
holders
Stake-
holders

323232
Selecting the stakeholders

333333
Materiality
Analysis
Method that compares the importance of
CSR/DD issues:
• to the stakeholders’ eyes
• to the company’s eyes
and represents the positions in a
materiality matrix.

343434
Positioning then selecting the issues
Responsible Critical
Not pertinent Strategic
Stakeholders’
opinion on
the
importance of
the issues
Company’s assessment on the
importance of the issues
• Stakeholder Consultation
• Benchmarking international companies
• Media Review
• Analyzing external questionnaires from
extra-financial agencies and investors

353535
The company’s view:
5 criteria for selecting the CSR/SD issues:
A. Issues with short-term financial consequences
B. Issues in alignment with the strategic commitments of
the company
C. Issues generally considered as pertinent by the
industry
D. Issues sufficiently important to the stakeholders’ eyes
for creating their present or future involvement
E. Issues that will be subject to standards in the future
D’après: Zadek & Merme: Redfining materiality - Accountability, 2003

363636

373737
Rational Commitment
Enlarged sphere of influence
CSR issues with some impact
from/on the core business
Radical activism
Large sphere of Influence
CSR issues that will request
major changes of the core
business
Social Mimetism
Limited sphere of influence
Anecdotal CSR issues with no
impact from/on the core
business
Legal Compliance
Minimalist CSR Reporting
(if mandatory)
Risk
management
Commitment

383838
3.2
Implementing
a project

393939
Specific stakes
• Technical issues
• Assessing the impacts of the project
• Reducing/Compensating the negative impacts
• Political stakes
• Finding allies
• Defusing oppositions

404040
Impacts, reactions… & influence
Project
Impacts
Affected
interests
Reactions
Resources
Allies

414141
Stakeholder Interests
Impacts
Resources Influence
Stance
Positive Negative Present Required
Side
residents
Local
authorities
Political
opponents
Chamber of
Commerce
Environmental
Activists
…
Stances analysis

424242
Stakeholder
mapping
Using two differentiation criteria and
drawing a matrix to :
• identify high priority stakeholders
• define the relationship to establish
• Objectives
• Means

434343
Typical matrix
SH
SH
SH
SH
SH
SH
SH
Differentiation
Criteria #1
High
Low
Differentiation Criteria #2
HighLow

444444
Power/Dynamism matrix
Low risk
stakeholders
Unpredictable but
manageable
stakeholders
Predictable risk
stakeholders
High risk &
hardly manageable
stakeholders
Power on
the decision-
maker/the
project
Aptitude for action
HighLow
High
Low
D’après Gardner, Rachlin and Sweeney (1986) Handbook of Strategic Planning, Wiley

454545
Power/Interest matrix
Marginal stakeholders:
no effort needed
Stakeholders
to keep informed
Stakeholders
to keep satisfied
Critical stakeholders:
establish continuous and
satisfying relationships
Interest for the issue
HighLow
High
Low
Power on
the decision-
maker/the
project
D’après Mendelow, A. (1991) ‘Stakeholder Mapping’, Proceedings of the 2nd Int’l Conference on Information Systems, Cambridge, MA

464646
Influence/Support matrix
Silent Opponents
Monitor the influence
Supporters
Keep satisfied, try to
enlarge their audience
Negative Leaders
Try to convince, but
not reinforce
Promoters
Support and empower
Influence
on other
stakeholders
Stance on the project
SupportOpposition
High
Low
D’après Anderson, Brsyson & Crosby (1999): Leadership for the Commun Good, University of Minnesota, Saint Paul ,MN

474747
Risks
• Purely political approach, without reassessing the
impacts or/and improving the compensations
• Perceptions of the project leader vs reality
– Biased stakeholder selection
– Low understanding of the prevailing stakes
– Deficient assessment of the power and influence of
allies and opponents
• Fast changing stances of stakeholders
• New stakeholders involved

484848
Rational Commitment
Implementation of tailored
compensation programs and
changes in the project to
reduce impacts
Radical activism
Reassessment and even
withdrawal of the project after
extensive impact reassessment
Social Mimetism
Implementation of ready-
made compensation actions
with no change in the project
Legal Compliance
Formal compliance with
consultation regulations… and
no taking into accounts of its
results
Risk
management
Commitment

494949
Mondavi Case

505050
3.3
Facing
a controversy

515151
Specific stakes
• Context:
– Project becoming highly controversial
– Industrial accident, scandal…
• Political stakes
• Defusing criticism and opposition
• Controlling the escalation risks
• Containing or deflecting attacks
• Communication stakes
• Dealing with media and social network involvement
• Crisis communication

525252
Medias & publics
Opponent
SH
Criticizing
SH
Supportive
SH
Partner
SH
General public
Medias &
Social
Networks
Attentive public
Interested public
Identifiying
public
Neutral
SH
Neutral
SH
D’après Padiloleau: La lutte politique quotidienne, in l’Etat au concret, 1982

535353
Responding
to controversies
• Mobilizing
• New stakeholders
• Medias & Social networks
• Alliances and Coalitions
• (Re)defining the situation
– Providing an interpretative framework
• Sense giving & sense making
– Scaling up by repositioning the situation in more
global (and often pre-existing) debates, that will help
to mobilizing new allies

545454
Mondavi’s project:
Job creation?
Promotion of Aniane’s terroir and wines?
Economic development
Tourism?
Small winegrowers and
young applicants eviction?
Victory of the branded wine
over the terroir wine?
Submission to the US big business?
Loss of national sovereignty?

555555
Synthesis:
Configuration:
• Objective:
• Stakes:
• Stakeholder
selection
• Method
• Level of
control
• Tools
Strategic Design
• Designing a CSR
strategy
• Creating
consensus and
involvement
• By the decision-
maker
• Rational and
open
• Predictable
High
• Materiality
matrix
Project
• Implementing
the project
• Anticipating &
involving opinion
leaders
• By the decision -
maker depending
on the situation
• Prospective and
political
• Predictable
High but can
decrease
• Mapping &
Public relations
Controversy
• Getting out of a
controversy
• Defending oneself
against charges
Finding allies
• Depending on
the situation
• Reactive &
Defensive
• Unpredictable
Very low
• Mapping &
Lobbying

565656
4
The State and
the stakeholders

575757
4.1
Public decision-making
and individual interests

585858
2 perspectives on the general interest
• The general interest is greater
than the sum of individual
interests. It is of a different
nature.
• Higher Civil Servants are the
protectors of the general interest
• They have the expertise to assess
and make decisions
• Civil society and intermediate
bodies are kept away from public
decision
• Symbol: the “Grands Corps de
l'Etat” and the rejection of
“lobbies”
• The general interest is, at some
point, a compromise between the
interests.
• Civil servants did not have a
monopoly on the expertise nor
the definition of the public
interest
• They solicit civil society and
intermediate bodies for
information and to take account
of all the consequences
• Symbol: the parliamentary
committee hearings and lobbies

595959
Grenelle de l’environnement
a political innovation in France
5 stakeholder groups
State, local authorities, Business, Unions, NGOs
Steps and means
• Public & stakeholders consultations
• Negotiations of the agendas
• Legal implementation
– Grenelle 1 Bill (Aug 2009)
– Grenelle 2 Bill (July 2010)
• Voluntary commitments

606060
Engaging stakeholders
• Call for contributions and inquiries before
launching a legislative process or a project
• Steering consultative committees

616161

626262

636363
4.2
Lobbying
Stakeholders in action

646464
Lobbying
Contribution of specific interests to the
elaboration of public policies and to the
legislative process, aiming:
• to improve public understanding,
visibility and the legitimacy of their
activities and interests;
• to provide policy-makers and stakeholders
with information to advise them of the
consequences and the effective scope
of legislative proposals and policies.

656565
Lobby
Representative of interests
who informs and influences the
public decision-makers, in order to
have them taking into account
these interests

666666
Tools & techniques
Documentation
Impact studies
Expertise
Arguments
Scale up!
Communication
Opinion makers
Medias & social networks
Publics

676767
Arguing
• Putting forward the general interest
• Overstating
– the impact magnitude (e.g. implementation issues, costs)
– the number of affected stakeholders
• Scaling up
– Will ease the identification and mobilization of other
stakeholders, yet not involved
• Hiding vested interests behind the general
interest or specific but more legitimate interests
– Staying behind larger interests
– Putting the smallest and weakest in the forefront

686868
At what step?
• Early (pre-law/decision) phases
– Preparatory works/Hearings
– Law proposals/projects
– Commissions
– Amendments
• Post-law/decision phases
– Constitutional review (for a law)
– Implementation regulation (time for entry to force, detailed
provisions): executive decrees, transposition of European
directives…
– Legal remedies…

696969
Triggering
the public decision-
making process
Initiate a debate for getting the legislature or the
government to change the law
• Campaigns
• Legal action
– Voluntary offence
– Lawsuit
– Remedy of unconstitutionality, of non-compliance with the
European Union rules…
• Controversies

707070

717171
For a democratic
lobbying
Transparency
Traceability of the legislative process
Integrity in the relationship
controlling conflict or interests & influence pedding
Fair access
Dossier: Lobbying landscape in France & AXA policy.

727272
Synthesis:
• Companies and business are legitimate stakeholders for
the public-decision making.
• All stakeholders (including NGOs) are using lobbying
techniques in order to defend and promote the interests
they are representing.
• The real stake is to establish a level playing field for all
stakeholders.
• Two issues are remaining:
• What is the representativeness threshold?
• What is the general interest, who defines it and how?
Emilien Matter et Xavier Schmitt. « La société civile, entre
devoir d’alerte et droit au chantage ». Slate.fr, 3 avril 2012

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