Effective Stakeholder Engagement: Ensuring Internal Company Alignment

Key Points

• While companies may approach stakeholder engagement on an ad hoc or reactive basis, driven by specific crises or requirements, this can result in limited value for both companies and stakeholders.
• To conduct meaningful stakeholder engagement, companies can first develop a coordinated, cohesive approach in which relevant business functions are aligned and is responsive to common barriers.
• BSR shares key actions to ensure internal alignment ahead of stakeholder engagement: establishing an overarching vision, identifying internal ownership, shifting from ad hoc to ongoing engagement, and balancing transparency and legal risk.

Following our first blog on stakeholder engagement in a changing business landscape, this is the second in a series of blogs unpacking the importance of stakeholder engagement, how regulations have reshaped the context, and how companies can continue to conduct meaningful stakeholder engagement in alignment with well-established industry best practices and expectations set out in standards such as the United Nations Guiding Principles (UNGPs) and the OECD Guidelines.

Companies that engage meaningfully with stakeholders can better anticipate risks, strengthen trust, identify opportunities for resilience and growth, and meet regulatory requirements. But recognizing the importance of stakeholder engagement is just the starting point.

Meaningful stakeholder engagement is the result of deliberate effort and strategy. Too often, companies approach engagement on an ad hoc, reactive basis, driven by specific crises, assessments, or compliance requirements. This results in fragmented conversations between companies and stakeholders, inconsistent messaging on what stakeholders can expect, transactional relationships, and limited value for either side. By creating a coordinated and cohesive approach to stakeholder engagement across the business, companies can avoid undertaking engagement reactively.

To put this approach into practice, companies can develop certain processes and actions to overcome common barriers to meaningful engagement.  

Coordinating Internally Ahead of Stakeholder Engagement

Internal Silos

One of the most common company challenges when relating to stakeholder engagement is internal fragmentation, especially across functions. Different functions, including operations, security, sustainability, human rights, legal, human resources, and investor relations, may all engage stakeholders. However, this often occurs in isolation, with differing objectives, inconsistent framing, and lost opportunities for cross-functional insight. 

To overcome this, companies need to establish coordination mechanisms that enable alignment and visibility across the business. This helps reduce duplication and ensures that stakeholders experience the company as a single, consistent actor, rather than as a collection of disconnected departments. Practical steps that can work well include an overarching stakeholder engagement policy, a cross-functional working group to coordinate engagement initiatives across teams, internal tracking of existing relationship touchpoints, and shared guidance that builds internal capacity and ensures consistency in approach, messaging, and response.

Potential Legal Risks

Achieving meaningful stakeholder engagement while balancing potential legal risks can be challenging for companies. A company’s commitments to transparency, dialogue, and co-creating solutions with stakeholders may generate expectations (e.g., that a company will incorporate all of their advice into a decision-making process) that are difficult to meet in practice given concerns about legal liability and disclosure risks in the current regulatory-driven landscape. Avoiding engagement is not the answer. Instead, companies need to design processes that are risk-informed, intentional, and legally sound to balance stakeholder trust and some degree of unknowns.

Building Processes Aligned with Meaningful Stakeholder Engagement

Companies can develop and take several key processes and actions, ideally driven by a cross-functional working group, to ensure they are ready to undertake meaningful engagement.

After following these preparatory actions, the company will be ready to conduct stakeholder engagement across all levels, from sites to corporate headquarters. BSR’s 5-Step approach can then support companies in developing fit-for-purpose engagement activities. 

Getting started on stakeholder engagement requires internal alignment, strategic clarity, and structured processes. By breaking down silos and taking actions aligned with meaningful engagement, companies can build the foundations for meaningful, inclusive, and effective engagement.

Interested in conducting meaningful stakeholder engagement at your company? Reach out to BSR’s Human Rights and Transformation teams to learn more