One of the companies that was asked about whether their boards actively considered the views of their wider stakeholder base said: ‘It’s more so for the big decisions. I think perhaps with the less high-profile work there is a tendency to overlook some stakeholder groups.’

Another business was concerned with the sincerity of the board seeking stakeholder views saying: ‘I feel that it’s done with a view to satisfying regulatory requirements, for instance, conduct risk, rather than a genuine desire to include them.’

When asked how their company captures and considers employee and other stakeholder views, range of practices were identified, for example, employee and customer surveys; feedback; test environments; focus groups; roadshows; and regular meetings with key investors.

One response said: ‘Stakeholder views appear to be limited to those who are accessible in the City only, hence institutional shareholders, lenders and senior managers are heard to the exclusion of others.’

The recent corporate governance report from the Business, Energy and Industrial Strategy (BEIS) Committee suggested that companies should establish advisory panels which would include employees and consumers to improve relationships between boards and stakeholders.

When asked what companies could do to improve their stakeholder engagement, suggestions included:

• directors spending more time with the business and speaking with stakeholders in the communities that the business works in;
• continually reviewing their stakeholder base and working out how to engage with individual stakeholder groups and evolving their strategy;
• allowing sufficient time to receive and consider stakeholder views before decisions need to be made; and
• putting employees higher up the list of priorities.

Peter Swabey, policy and research director at ICSA, said: ‘It is encouraging to see that 73% of the organisations that responded to our poll already consider the views of their wider stakeholder base. It is worrying that 11% do not, however, and disconcerting to read that directors and advisers should comply with Section 172 of the Companies Act 2006 more.

‘Directors have a legal duty to have regard to the interests of all stakeholders and it is imperative that boards do so. It is a vital part of the decision-making process and we are working closely with the Investment Association on a joint project to record good practice and so help UK PLC boards better understand the views of their employees and other stakeholders.

‘We will be publishing practical guidance to enhance understanding of the interests of employees and other stakeholders, in accordance with board duties under Section 172 of the Companies Act, this summer.’

 ICSA's latest survey of the governance and compliance/core communirty is available here.