Reana RossouwWritten by

Stakeholder engagement in Africa: Culture, risk and individual engagement

Advisory and consulting| Views: 93

Stakeholder engagement in Africa can be a rewarding experience when the engagement process is customised based on individual stakeholder needs. Diverse stakeholders can have a positive impact on company activities, as feedback and inclusion can provide a different perspective on the competitive landscape of a business. This is a valuable opportunity that companies should take advantage of to improve projects and advance business strategies.

Companies should realise and understand the difference between stakeholder groups and conduct research accordingly on local customs, cultures, traditions, values, diversity and religious beliefs for effective and sustainable engagement. Only when companies are aware of the various aspects that are significant to individual stakeholders can they create effective engagement strategies, as many of these aspects will impact the engagement process, such as geographical location, internet access and local operating contexts.

Valuable relationships build insight with benefits

Stakeholder engagement can create valuable relationships that will provide insight on business activities that will benefit companies. Companies that know their stakeholders and interact often are more likely to maintain good relationships, as well as improve their reputation. This can only be done after spending significant time preparing and strategising around the engagement process, including gaining a deep understanding of local stakeholders’ profiles, their customs and significant cultural and social aspects.

An organisation’s strategic success depends on positive relationships with those who have a direct and indirect stake in their business. Effective and mutually beneficial relationships help to build an enabling environment for the business to succeed, while meeting the needs and expectations of stakeholders. This makes stakeholder engagement a critical part of executing business strategy. Good stakeholder engagement makes organisations perform better. It increases their knowledge and contributes to their licence to operate. Companies should therefore strive to create the kind of relationship where both parties take each other’s best interests to heart, and work to achieve the best-possible outcome for each other.

Stakeholder relationships vary over time and between different stakeholder groups, but the aim is to build long-term associations in line with long-term strategy. When companies engage with stakeholders, organisational strategy should form the basis and framework for communication. It is through this communication that companies can establish what each stakeholder needs most and how to meet those needs, how best to promote an organisation’s purpose as a business and solicit support, identify trade-offs and create a shared vision and values. Stakeholders set the context within which companies operate; without stakeholder engagement, there can be no sustainable businesses.

Cultural aspects of stakeholder engagement in Africa

The diverse nature of stakeholders in Africa requires that companies conduct research on social, cultural political and economic landscapes.

Examples of social differences that can impact stakeholder engagement:

  • Language barriers
  • Gender dynamics
  • Religion and culture
  • Literacy
  • Tribal and indigenous traditions
  • Age

In the African context, engagement strategies must be carefully created, keeping social dynamics in mind that will benefit stakeholders equally and create trusting relationships. Every community and stakeholder group is different and it is important to not apply identical engagement strategies for all stakeholders. For example, in some communities, gender roles between men and women can impact dialogue if women don’t feel comfortable sharing their opinions when men are in the same room. And in some groups, younger individuals are not supposed to share their thoughts before older people have expressed their opinions.

Indigenous groups living in the same area can have significantly different values and local customs. Therefore, they cannot be included in the same stakeholder groups when companies strategise around engagement. In Africa particularly, rural communities are sometimes heterogeneous, divided and isolated, often with entrenched local tensions exacerbated by poverty.

A large proportion of members of such communities:

  • Have not reached a shared vision as a result of inadequate leadership, organisational structures and processes.
  • Do not easily achieve decisions, whether individually or jointly.
  • Often suffer from chronic ill health and debilitation (inadequate and poor nutrition, water supplies, sanitation) and are not always well enough to fully participate in meetings.
  • Spend much of their time in day-to-day subsistence activities (tending crops and livestock, fetching water and firewood, caring for families) and do not have time for lengthy participative processes.
  • Hope for a job in an urban area, and once empowered through training and education do not readily remain in rural areas.
  • Have limited access to information and as a result, are concerned mainly with survival, with little time for other interests.
Stakeholders must be valued equally

Companies that don’t place equal value on all the different stakeholder groups, even if they appear to have many similarities, are increasing risk since individual needs and concerns can vary. One of many reasons companies engage with stakeholders is to find out about expectations, opinions, perceptions, needs and concerns of company activities and operations that will impact communities and neighbouring areas. When companies don’t give individual attention or acknowledge the differences between stakeholder groups, they face extensive reputational risk.

Not being able to reach certain stakeholder groups can also be problematic, because of lack of infrastructure such as accessible roads, remote locations and internet access constraints. Language barriers are a difficult aspect of communication that can hinder communication between companies and their stakeholders. In such cases, the use of translators may be necessary. Using experts and consultants who are familiar with certain stakeholder groups (local customs, language and beliefs), increases the probability of achieving successful results during the engagement process.

There’s no single recipe for stakeholder engagement

Stakeholder engagement should be customised based on various factors, such as geographical areas, language and local customs. There is no one-size-fits-all approach when it comes to engagement. The type of relationship the private sector should try to develop with its stakeholders, and the resources and level of effort that it should invest, will differ according to the nature, location and scale of initiatives, strategies, programmes and projects, the phase of its development and the interests of the stakeholders themselves.

Companies do not have the luxury of excluding stakeholders based on scenarios that require more effort and advanced engagement strategies. Individual strategies and engagement plans for different groups are more likely to generate conversations that can improve projects and strategic objectives. For example, companies that use electronic surveys and assessments could potentially exclude stakeholder groups in rural communities who do not have electricity, computers or internet access.

Similarly, companies must decide which engagement tools are most suitable for different stakeholder groups. The assumption that all stakeholders can be treated the same and are expected to want to engage cannot be taken for granted. Some stakeholder groups might not appreciate companies operating in their area, as not all organisations are welcome in certain regions and therefore communities and individuals may feel reluctant to participate in dialogue.

Relationship-building takes take

Establishing valuable relationships can take a long time and companies must be patient during the engagement process. The company representative who is tasked with the responsibility of local stakeholder engagement is critically important. Many communities distrust representatives who are not the most senior official or who are not from the region, as it indicates to them that they are not important enough to warrant engagement with the executive.

Some stakeholder groups must prepare for engagement – and in Africa, selecting and electing representation often entails a rigorous process of negotiation. For instance, traditional leaders could be assigned the responsibility to engage and speak on behalf of a group of people and to enter negotiations. Over time, these elected representatives may change many times.

Sometimes it is better to use a local representative or consultant/facilitator who is impartial, as stakeholders are more likely to engage with people they trust and are familiar with. One of the best ways to achieve this is to localise engagement and appoint people with the right skills, training and disposition for community engagement, getting them into the field as quickly as possible. Maintaining a regular presence in the local communities greatly helps to personalise the relationship with the company and engender trust. Talking with a familiar face who comes to the village regularly or lives nearby creates an informal atmosphere in which grievances can be aired and sorted out, or referred up the chain of command. This is usually more convenient and less intimidating to people than having to travel distances to the company offices during business hours to file a formal complaint.

Combining this with a transparent process by which stakeholders can understand how decisions are reached inspires confidence in the engagement system. During critical times, it is important to have an immediate response to time-sensitive complaints, such as a fence being knocked down by a contractor, livestock getting out or the contamination of water sources that a community is dependent on. A related issue is making sure that company personnel who receive grievances have the authority to resolve basic complaints themselves, as well as a direct reporting line to senior managers if the issue is more serious or costly to address.

Limiting risk

To limit risk when interacting with stakeholders entails that companies embrace a cautious approach and methodology for the engagement process. Only when companies have analysed the various stakeholder groups and are aware of cultural aspects, can they customise the engagement methodology. Companies must consider various scenarios of aspects that can go wrong and that could negatively impact dynamics in the relationship.

Understanding local contexts is easier said than done, but necessary when managing risk to be able to analyse the impacts companies could have on stakeholders. The engagement process should make companies aware of stakeholder concerns about business activities. Stakeholder engagement is also necessary to find out how company activities can improve the standard of living in communities. Carefully conducted engagement is more likely to benefit companies with social contextual value. An important aspect to remember is that stakeholder engagement can change over time.

To ensure that companies get accurate answers from various stakeholder groups requires different communication methods. Every stakeholder group needs to be assessed, taking sociological and cultural aspects into consideration. This requires that engagement solutions must be adapted based on individual situations in the engagement process. For example, to extract information from a community might entail personal interviews conducted by an expert who is familiar with the local language. Some stakeholders might give valuable information in online questionnaires, depending on the level of information companies think they will benefit from. To apply different engagement methodologies based on the stakeholder group will limit risk, as the quality of the information will increase.

Multiculturalism contributes to a complex process

International research on stakeholder engagement in Africa acknowledges how the engagement process can be a complex exercise because of multicultural societies. In personal as well as business relationships, follow-through is important. The same principles apply to stakeholder engagement. Once consultations have taken place, stakeholders will want to know which of their suggestions have been taken on board, what risk or impact mitigation measures will be put in place to address their concerns and how, for example, project or operational impacts are being monitored.

In addition to reporting back to affected groups and other stakeholders, there are other types of reporting that target a different set of stakeholders. Sustainability reporting, for example, provides companies with an opportunity to communicate information to a much wider range of stakeholders about the environmental, social, economic and governance performance of the business. It also offers a platform to report back on the process of stakeholder engagement itself, such as who has been consulted, on what topics and with what results. Consequently, a number of international codes and standards for corporate reporting now include requirements for implementing and reporting on stakeholder engagement.

A current and regularly updated stakeholder engagement database can be a useful management tool. It should ideally contain details of the various stakeholder groups (their representatives, interests and concerns); details of consultations held (including when these took place, the topics discussed and the results); any commitments made by the company (outstanding as well as delivered); and a record of specific grievances lodged and the status of their resolution. Maintaining such a database is important for continuity purposes, especially in transitions where personnel changes are common. It can also come in handy for reporting purposes or when a company might need to demonstrate the adequacy of its consultation process.

Next Generation assists companies with end-to-end solutions in stakeholder management, from stakeholder identification, analysis and prioritisation to stakeholder management strategies, stakeholder engagement, due diligence, reporting and developing grievance management processes.

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