What is the Stakeholder Issue in

Sustainable Development?

Third largest PGM producer

30 000 employees
Operations in located in RSA

Barnard Mokwena
Vice President: External Affairs
Lonmin Platinum
What is the Stakeholder Issue with
the Mining Brand in South Africa?

Is this ISSUE an Or is it a THREAT to the

Opportunity sustainability of operations
to do things differently?

Why?

Social license to operate increasingly important

Introduction

Stakeholders. The most quoted definition is that given

by Freeman (1984):
any group or individual who is affected by or can affect the
achievement of an organisations objectives

The challenge of the Industry Brand in South Africa

Associated with a legacy of more than 100 years
Epitomises exclusion, repression and exploitation
Almost a replica and a symbol of the previous regime
Creating Sustainable Value and Wealth

Dynamic and
Complex
Eroding
The Broad Post-1994
Stakeholder Issue is characterised by
Quest for socio-economic liberation,
And is driven by human rights culture,
and memories of land ownership

Distinctive Organisational
Competencies

Value? CSR - Poverty

Social Justice and

Equity
What strategic stakeholder
management can achieve

Robust relationships with stakeholders

High reserves of reputational capital
Contribution to sustainable business growth
and sustainable development
Post-apartheid Robust Relationships

Characteristics of healthy relationships:

Control Mutuality
The degree to which stakeholders and the company are satisfied with the level of control or
influence they have over the relationship.
The most stable, positive relationships exist when stakeholders experience that they have
some degree of influence over the relationship.
Trust
The confidence that the company and its stakeholders have in each other and the
willingness to open themselves to the other party.
Integrity - as the extent to which any partys behaviour is perceived as fair, just, and
honest.
Competence, which is the belief that an organisation has the ability to do what it says it will
do.

Satisfaction
Why stakeholder relationships
matter?
Social Reporting
Reputational Capital
and Compliance
Increasingly, corporate
Information on the quality of reputation is understood as
stakeholder relations is part built through the
of measuring and reporting organisations relationships
social/ environmental with all stakeholders
impacts Stakeholder
relations
Corporate Organisational
Governance Performance

Quality of relationships also

informs risk management
Relationships as a business
and future regulatory
asset and a management
requirements
Stakeholder engagement competence.

The quality of relationships drives

stakeholder engagement and
responsiveness, ensuring the needs
and objectives of stakeholders are
taken into account
Reputational Capital

What is reputational capital?

The market value of the Reputational
?
Goodwill capital
company in excess of its
book value and
separable, intangible Market value Intangible,
assets separable Trademark
assets
Patents
It constitutes the residual Know-how
value of the companys Customer Relationships
Book value Software
intangible assets over WIP
and above its stock of Order backlog

patents and know-how

Much like knowledge capital, reputational capital is an aggregate
intangible asset that must be evaluated using both internal and
external information
Reputational Capital

High reserves of reputational capital give an

organisation distinct advantages:
GENERATE REPUTATIONAL GAINS
Their products/services and stock offerings entice more
customers and investors and command higher prices
Their jobs lure more applicants and generate more loyalty and
productivity from their employees
Their clout with suppliers is greater and they pay lower prices
for purchases and have more stable revenues
MITIGATE THE RISK OF REPUTATIONAL LOSSES
Their risks of crisis are fewer and when crisis do
occur, they survive with less financial loss
Roadmap to Strategic Stakeholder
Management

Step 1: Step 2: Step 3: Step 4:

Stakeholder Stakeholder Stakeholder Stakeholder
Mapping Listening Profiling Engagement

Deliberate Strategy Environmental Emergent Strategy Inclusive,

as point of Scanning integrated
Issues / Risk
departure approach
Formal/informal Management
listening

Stakeholder Stakeholder Names and faces

universe insight orientation
Main folders Know their stakes Sub folders with
for key strategic + issues detail information
stakeholders
Roadmap to Strategic Stakeholder
Management Step 1
Step 1: Identify stakeholders based on the
Stakeholder organisations strategy
Mapping Your stakeholders are those groups
Deliberate Strategy that can either hinder or facilitate the
as point of achievement of your strategic goals
departure Prioritise stakeholders based on the
organisations strategic intent (primary:
secondary)
Various techniques to map
Stakeholder stakeholders
universe The result will deviate from the generic
Main folders
stakeholder map
for key strategic
stakeholders
Roadmap to Strategic Stakeholder
Management Step 2

Step 2:
Stakeholder
Listening
Why?
Environmental How?
Scanning
Formal/informal
What?
listening
Lonmin example

Stakeholder
insight
Know their stakes
+ issues
 Stakeholder listening: How?

Two main categories of listening:

Environmental scanning (continuous)
Mostly media & document analysis
Internal processes to deal with issues/risks should be formalised
Formal measurement/research (pre-defined intervals)
Reliable & valid social research methods
Combine quantitative (describe with statistics) and qualitative
(understand the reasons why) methods
Adapt measurement instruments and tools to the needs of
specific stakeholder groups
Set targets & track progress
Two-way process: give feedback to stakeholders after
measurement
Stakeholder listening: What?

Focus of measurement depends on which stakeholder or stakeholder

groups are being listened to
Generally, stakeholder listening can focus on:
Perceptions, needs, expectations, experiences
Relationship quality
Broadly influenced by various indicators of communication and
perceived behaviour or conduct towards stakeholders
Reputation
Social impact or social performance (mostly communities)
Strategic alignment (mostly employees)
Identifying gaps
Describing specific aspects
Measuring or quantifying
Stakeholder listening: Example

Community satisfaction survey

Quantifying perceptions in an index to plot performance
Focus group interviews
Personal interviews
Simultaneous translation where necessary
Compare ratings over time
Compare community ratings with staff/management
ratings on specific issues
Benchmark (example)

Communication

Access
Issues addressed
Frequency
Behaviour
More

Health
HIV/Aids
Environment

More
 Communication Indicators 1-7

Benchmark Access

(example) Issues addressed

Frequency

Amount

Timeliness

Information flow / 2-way comm./ feedback

Style/symmetry/reciprocity

Complexity/clarity

Accuracy

Coordination/integration

Participatory approach

Credibility/Trustworthiness

Control mutuality

Mutual understanding
 Behavioural Indicators 1-7
Benchmark Health

(example) HIV/Aids

Environment

Housing

Involvement in the community

Commitment

Empowerment

Visible transformation

General visibility of management

Transparency

Coordination of projects

Control mutuality

Relationship behaviour

Corporate citizenship
Company Performance (example)
Roadmap to Strategic Stakeholder
Management Step 3

Use the results of stakeholder

Step 3:
listening to profile stakeholders
Stakeholder Become specific
Profiling
Use the issues detected in
Emergent Strategy stakeholder listening to
Issues / Risk inform emerging strategy
Management Prioritise issues based on their
potential impact on
stakeholders
The issue: stakeholder matrix
Names and faces
orientation
Sub folders with
detail information
Roadmap to Strategic Stakeholder
Management Step 4

Develop a company-wide, coordinated approach towards

stakeholder engagement Step 4:
Understand the companys stakeholder interfaces and Stakeholder
govern value-based interaction through clear stakeholder Engagement
protocols
Inclusive,
have measurable objectives per stakeholder interface
integrated
provide clarity on the roles and responsibilities of approach
different teams interacting with stakeholders
Develop a communication programme for each
stakeholder group: one size doesnt fit all
Have a auditable system of stakeholder engagement (track
interaction, keep record of commitments made)
Identify, analyse, manage and track issues and the impact
of issues on stakeholder relationships
Engage stakeholders during crises
Inclusive, integrated approach to
stakeholder engagement

Stakeholder engagement Current approach to

in the past stakeholder engagement
Project based Engagement based
Money Relationships
One-way process Two-way process
Teaching Learning
We vs. them Togetherness, trust
Activism risk Risk management
Peripheral Core business
Compliance Competitiveness
Cosmopolitan Population