I am sure a number of us are familiar with the stakeholder theory of corporate governance. I am a strong advocate of this approach to governance as it promotes the bigger picture within which a corporate operates as well as emphasize the importance of it being a good corporate citizen.

One aspect of the theory is that it seeks to establish partnerships between the corporate and its  stakeholders based on mutual respect for each other as they collaborate to register success that will be attributable to efforts or resources that all parties concerned can claim involvement in one way or the other.

I have learned that the depth at which corporate actors understand and recognize their respective stakeholders is critical in their identification of key stakeholders. Why is it important that company X recognizes shareholders, regulators, customers, suppliers, Government, lenders and employees, for example as key stakeholders? What is the risk the corporate runs for mismanaging those partnerships or indeed not being proactive in establishing those important relationships? How does the corporate handle conflicting or competing interest in it among different stakeholders?

The answer to the vexing questions above are many but primarily, the corporate must strive to achieve a balance…being mindful that governance actors in the corporate have a duty to promote the success of the corporate and act in its best interest.

I would suggest regular appraisal among governance actors on the importance of identifying stakeholders and perfecting the art of management in that regard.

Let’s share…