Reporting on stakeholder engagement

The board should report to its members or shareholders and key stakeholders on how it has taken the impact on them into account when making decisions. The board should provide feedback to those stakeholders with whom it has engaged, which should be tailored to the different groups. Reporting on how boards have considered the impact of their actions on stakeholders is key to establishing trust and demonstrating transparency and accountability.

Primarily, reporting is done through the annual report. Other reporting such as separate corporate social responsibility reports and the company website should be used as needed by sports organisations.

In the annual report, stakeholder identification and engagement should be put in the context of the organisation’s reporting on its wider business model and governance arrangements to provide a picture of how these contribute to the long-term success of the organisation and how directors have performed their duties. It should not be treated as a separate activity that can be ‘tacked on’ to existing reporting.

Stakeholder engagement reporting should cover the following three questions:

• Who are the key stakeholders?
• How does the board hear from its key stakeholders?
• What were the outcomes of engagement with key stakeholders, and what impact did that have on decisions?

The annual report should explain concisely the processes that the board has in place to receive input and information from stakeholders. This might cover not only the mechanisms normally used for each of their key stakeholder groups, but also how the board approaches more ad-hoc engagements in response to specific events. This is also an opportunity for the board to report on any assessment that it has carried out on the effectiveness of its stakeholder engagement processes and on any changes it intends to make as a result.

To demonstrate how the directors have fulfilled their duties, the annual report could explain how information gathered through engagement with stakeholders has informed the board’s decisions during the year. Disclosure should be specific and relevant. Readers are wary of boilerplate language in annual reports. Disclosures should also follow the ‘fair, balanced and understandable’ principle and present an honest appraisal rather than being treated as a PR opportunity.

The information on outcomes can be a mixture of qualitative and quantitative data. Narrative around the outcomes is important, but it can be enhanced by the careful use of quantitative data, for example, data from engagement surveys or other KPIs.

The RFU's 2021 Annual Report (pp. 28-33) provides an example of how to summarise the inclusion of stakeholder considerations into decision making.

Reporting to other stakeholders

While the primary audience for the annual report is generally members or shareholders, much of the information it contains will also be of interest to other stakeholders. However, as the Financial Reporting Council’s ’Guidance on the Strategic Report’ emphasises, the annual report should not be seen as a replacement for other forms of reporting addressed to other stakeholders.

Organisations should therefore consider what other reporting and feedback mechanisms might be necessary. The same methods will not always be equally suitable for different key stakeholders, so thought should be given to how best to report to each group. Even ad hoc or specific engagement exercises should be followed by an indication to the groups concerned as to how their input was used. This helps them to feel valued and part of the organisation. As with the engagement itself, the intention should be to develop arrangements that are effective and convenient for the stakeholders as well as for the organisation.

Publications and online resources

Many organisations produce additional reports, either on a broad range of CSR activities or on specific issues such as workforce and community engagement or diversity and inclusion. Where such reports are produced, they should follow the same reporting principles as set out for the annual report. They should be relevant, balanced and avoid boilerplate. Good signposting on websites is important to show where stakeholders can find information relevant to them.

Timing of feedback

Different stakeholders may want or require reporting on different timescales. Annual reports on the work of the board may be appropriate for some categories, but the board
should consider how to update other stakeholders and whether more regular updates or more immediate feedback would be appropriate. Social media and other forms of communication could be used in these cases.

Conclusion

Effective stakeholder engagement is essential. Aside from regulations and legal responsibilities, the principle behind engagement and the essence of engagement is that genuine dialogue and consultation with those individuals, groups and organisations who are considered to have an interest and be affected by your organisation is not simply a task - it is both an obligation and a benefit that can significantly enhance organisational effectiveness. Stakeholders have a breadth and depth of knowledge and interests that builds on and informs internal organisation practices. Without this communication, sports organisations cannot understand if their decisions and activities are having the desired impact on their mission and vision. Different organisations may be at different levels of engagement with their stakeholders but should continuously try to improve engagement practices to inform and improve their governance and decision making.