Toward Stakeholder Capitalism (Communications)
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Toward Stakeholder Capitalism (Communications)

December 06, 2021 | Report

What the Shift Means for Senior Communications Executives

The concept of stakeholder capitalism is not new. Its origins reach back at least to the early years of the Great Depression. Where the business community is seeing change is in increased pressure for businesses to engage more publicly and act more transparently as social media platforms amplify the voices of diverse stakeholders, and investors place greater focus on stakeholder issues ranging from diversity, equity & inclusion, to sustainability, to employee well-being and workforce management, to community impact.

While many organizations have talked about the current shift toward stakeholder capitalism, The Conference Board has uniquely focused on what it means, in practice, for CEOs and the C-suite. During 2021, The Conference Board held a series of roundtable sessions with CEOs and chief financial, legal, human resources, government relations, communications, marketing, and technology officers focusing on 1) whether the shift toward stakeholder capitalism is significant and durable, and 2) what it means for their roles, the organizations they lead, and the composition and functioning of the C-suite. The discussions were held under the Chatham House Rule, with participants free to use the information received but barred from identifying speakers or their affiliation.

Here is what communications executives told us:

What Is Changing

Senior communications officers agree the shift is durable as the voices of diverse stakeholders—investors, owners, employees, customers, community members, and “shapeholders”—those who have no “stake” in a company, but who can “shape” public opinion and a company’s reputation—are becoming more prominent in the deliberation over corporate strategy and the setting of expectations. From their perspective, the shift is in part due to changes in the media landscape; not only the prominence of social media, but also the nature of coverage in the so-called mainstream media. Both need to be fed with unprecedented speed and volume—and that is not going to be achieved from traditional messaging platforms such as company press releases.

They believe that given the complexity of many business issues involving multiple stakeholders, greater communication and collaboration across the C-suite is essential to allow them to do their jobs successfully. It used to be that social and environmental issues were compartmentalized—somebody else’s problem. Now they’re everybody’s issue, especially those in a communications role.

What the Transition Means for Senior Communications Executives

Senior communications executives need to understand the firm’s full ESG story, and the views of both stakeholders and “shapeholders” that contribute to the firm’s reputation. As ESG issues become more important to stakeholders, and as firms more deeply integrate sustainability into their business, senior communications executives need to keep pace with these developments to ensure the firm is telling its sustainability story authentically, effectively, and reliably to multiple audiences. At the same time, while senior communications executives have always been attuned to what is trending with stakeholders, they now also need to focus on “shapeholders” and how to communicate to each one. These are often nongovernmental organizations, social media influencers, and activist groups who have no stake in the company, but who can have a significant impact on reputation.

Communications executives need to be masters of data. They need data to analyze and explain to the organization the state of the firm’s reputation, and the impact that certain actions (e.g., taking stands on social issues) are likely to have on the organization’s reputation. In addition, they need to have a command of data in telling the firm’s ESG story to multiple stakeholders.

“Five or six years ago, you could tell anecdotes and that would be enough to get the story across. Now data has become more important to make the story credible and convincing.”

“We are investing more in data analytics to try and measure trust. We may not change the minds of shapeholders, but we need to get our story out there to help shape the discussion. To be credible about ESG issues, you need clear measurement of impact. Only then can we then communicate it to stakeholders to show there is action behind the words.”

Communications leaders are moving beyond the role of chief spokespeople, becoming more strategic advisers and coaches within companies, especially for senior leaders. Their enhanced leadership role has become more strategic in several ways:

  • They educate CEOs and the C-suite on both internal and external stakeholder groups and how their influence affects the company.
  • They help senior leaders become better storytellers by focusing on authenticity, transparency, and inspiration. Authentic storytelling is crucial given that stakeholders, including employees, want a human voice rather than a generic “executive” message.
  • They help make senior executives comfortable operating in a more freewheeling environment: they increase the tolerance for risk and missteps when executives must react in real time to comments by all kinds of individuals and groups rather than just delivering scripted messages.
  • While audiences appreciate authenticity and transparency, the expectation of a rapid response creates risk that CEOs may say the wrong thing.

“We have to make our leaders become better storytellers. We have to be more proactive and tell our own story rather than waiting for others to tell it for us. We have to get our executives to be more open to and ready to respond to increasing challenges in the public arena. There are a lot of land mines out there.”

Communications leaders now also serve a convening and coordinating function, covering ESG topics to foster alignment across the full enterprise. Often, these topics are addressed in business units throughout the organization, but when they grow in importance, as has happened with social topics, it’s critical to have a central point of coordination for a commitment to stakeholder management to be successful and credible. Achieving alignment across the organization and with the board requires senior communications executives to have clarity on the “who,” the “what,” and the “why.”

“There were pockets of the social and governance initiatives in different functions with different teams reporting to different leaders. We finally created an ESG office to thread all this work together. It’s really a convener-type role, but it created a more cohesive look. We found we do a ton of work on these issues, but it was never articulated in a comprehensive way. We now have a great story to tell.”

Even in the unlikely event that everyone goes along with this shift, the trade-offs are highly challenging to explain to different stakeholders. Some executives, employees, customers, investors, and others will not agree with, or want to support, the shift toward a stakeholder focus. Moreover, when balancing multiple stakeholders, the trade-offs will be many and difficult. These dynamics create a special challenge for communications executives and their C-suite colleagues. In the past, it might have been up to communications to “thread the needle” to craft a message that satisfies every constituency. That’s no longer possible or effective all the time. Companies need to make difficult, unpopular decisions, and communications executives should play a critical role by encouraging candor and openness to collectively triggering new ideas, allowing those challenging trade-offs to be discussed nonjudgmentally and transparently.

Senior communications executives need to bring greater managerial proficiency and people skills to their work.

  • They need listening skills to engage fully with internal and external individuals and groups, convene different kinds of people and groups, and work well with executive management. Communications leaders know all about uncomfortable conversations, but listening can be even more uncomfortable. Don’t assume you know what the issues are; rather, go out and talk to and listen to stakeholders.
  • They need to build relationships with—and represent—all stakeholder groups, keeping in constant dialogue with them to stay informed about their needs and thinking. Neglecting an important group can have negative repercussions.
  • They need to be self-aware, capable of recognizing their own biases and suspending judgment when dealing with thorny issues or stakeholder concerns. They need to act with humanity, humility, and integrity—building trust that will enable them to credibly explain the inevitable difficult trade-offs among stakeholders.

While senior communications executives need to rely on strong persuasion skills to convince business leaders to act, they need to seek support from their CEOs in defining their broader role and authority level in the organization. Chief communicators deal with many different stakeholder groups inside and outside the company, but they often don’t have direct authority to initiate action. Having the CEO’s support in defining the broader role of the communications executive helps with credibility and ability to influence.

“CEOs are looking for the chief communications officer to steer arguments internally and externally and deal with all stakeholders and functions. We have new and more responsibility but without clear authority. We are being asked to coach and move people in operating roles to communicate messages to different audiences, so strong persuasion skills are necessary. We have asked our CEO to be clearer about the communications role. I think this will help us get things done.”

What the Transition Means for the Communications Function

Proficiency in traditional communication methods and platforms is no longer sufficient. The communications team now needs:

  • A deep and comprehensive understanding of the business’s impact on stakeholders, society, and the environment.
  • A deeper familiarity with stakeholders and “shapeholders” and their views, even down to a small activist group whose voice could prove influential.
  • More critical analytical skills to help set priorities.
  • More two-way engagement skills.
  • Full understanding of the platforms, especially social media, that are most effective in reaching different stakeholder groups.

“In the past, a do-no-harm approach to social issues dominated, such as preventing violating human rights in our supply chain. Now companies are thinking about what to do to advance social aspects and have a positive impact. An important next step is to think about how to translate the social focus into business results.”

Communications teams need to be brought in earlier on business decisions. For example, they should be involved earlier in the mergers & acquisitions process, not just to tell the story once the deal is about to be announced. The role here is to conduct due diligence on reputation earlier in the process to avoid being blindsided.

Data are becoming more and more important in communications. The entire communications function needs to be fluent in ESG data to help tell the company’s sustainability story more effectively. Communications leaders need to question the reliability of data presented and be confident the data are investor grade or close to it to enhance the credibility of the message.

The communications function needs to think more systemically and globally. For international companies, this mindset includes considering that messages tailored to a certain geography might be replayed in another region and received differently. This also means considering how internal messages might be received in regional contexts.

Changing demands for communications teams have caused reorganizations within the function. In some cases, these changes have involved shifting resources from writing reports or producing other content that doesn’t get much attention to building greater data capabilities and social media impact. In many cases, activities such as media relations and social media are moving back in house.


To understand how the shift to a stakeholder focus is affecting chief financial, human resources, legal, communications, marketing, and government relations officers—and the functions they lead—see the full series here.

Additional Resources From The Conference Board

Choosing Wisely: How Companies Can Make Decisions and a Difference on Social Issues, June 2021

Lessons from Leaders for Leaders: Organizational Impact & Social Change, May 2021

Lessons from Leaders for Leaders: Innovative People Approaches, May 2021

Brave New World: Creating Long-Term Value through Human Capital Management and Disclosure, December 2020

Insights for Investors and Companies in Addressing Today’s Social Issues, October 2020

Purpose-Driven Companies: Lessons Learned, October 2020

Sustaining Capitalism 2020 Election Series, September 2020 | CED Compendium

Organizational Characteristics of US Benefit Corporations, April 2020

Consumers' Attitudes about Sustainability – Part 2: How Sustainability Features Influence Consumers’ Choices, February 2020

Sustaining Capitalism: Bipartisan Solutions to Restore Trust & Prosperity, February 2017

Sustaining Capitalism Podcast Series, 2018–2021

CEO Perspectives, Episode 3: Multistakeholder Governance, May 2021 | Podcast

Sustainability Watch: What Can We Learn From 15 Purpose-Driven Companies?, September 2020 | Webcast



Senior Director, Content Quality
The Conference Board


President and CEO
Society for Corporate Governance
The Conference Board ESG Center

Rebecca L.Ray, PhD

Former Executive Vice President, Human Capital
The Conference Board

Dana M.Peterson

Chief Economist and Leader, Economy, Strategy & Finance Center
The Conference Board

Dr. Lori Esposito Murray

Former President
Committee for Economic Development

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