Stakeholder engagement

Guest blog by Louise Fleming, Aretai LLP | 3 April 2017

This is the first in Louise Fleming’s series of three blogs focused on feedback in internal audit.

What does stakeholder engagement mean and how can you make it work for you?

Through this series we will examine and offer tips on:

1. Receiving feedback from stakeholders
2. Giving feedback to stakeholders
3. Giving and receiving feedback within internal audit

Receiving feedback from stakeholders

‘Stakeholder engagement’ is regularly identified as a top priority for internal auditors.  But what does it really mean?  A stakeholder is ‘a person with an interest or concern in something’ and engagement implies a level of participation or involvement.  Fundamentally, we are here to deliver independent assurance; but we would also like to add value to the business and be a trusted partner of management.  All three of these rely on stakeholder engagement.

Our business stakeholders probably use a CRM (Customer Relationship Management) system to track their engagement with their customers.  This is good business practice, and one we should replicate in internal audit (at least with a personal or team spreadsheet or equivalent).  But this is the process, which as internal auditors is probably within our comfort zone.  What we need to focus on is the human element. Before we can reach the hallowed ‘trusted partner’ status, we need to build actual relationships with actual people. 

TIP #1: ASK for feedback on working with internal audit. 

Let’s not spend hours within our function trying to work out what best practice looks like and how we might tick the stakeholder engagement box.  We should do what the business does and ask our ‘customer’:

• If your function does not already conduct a regular stakeholder survey, now would be a good time to introduce one.
• If you have not had a feedback conversation with your key stakeholders about what is going well in your working relationship and what you could improve on, today could be the day.
• If you dare, request some 360 degree feedback and include your key stakeholders in the list of respondents.

TIP #2: SHUT UP and listen to the answer.

This may sound harsh, but it is ultimately fair.  We have to approach this as a listening exercise, not a defensive play.  We must REALLY want to understand how our stakeholders feel.  Remember, two ears one mouth, or the warning sign ‘W.A.I.T.’ (Why Am I Talking?).  It doesn’t matter which personal prompt you use to remind yourself to be quiet and listen, it just matters that you do it. 

We acknowledge our stakeholders have a different perspective and that their priorities will be different from ours.  Good practice is to be clear that you want to start by listening and state that you will take time to reflect on the feedback before responding – there is no need to come up with solutions in the moment.  Thank your stakeholder for sharing their feedback and try and remove emotion from your response.

TIP #3: Pick 3 THINGS you can do differently and commit to change.

Avoid a long list of actions in response to your stakeholder’s feedback.  Instead, identify two or three things that will make a difference and commit to change.  This may include some process steps that you can diarise (more regular communication, more time invested to understand their business), but it is also likely to include some relationship actions (how we approach working with stakeholders, how we build trust).

In summary

Invest time and energy to engage with your stakeholders: 

• understand their priorities;
• ask them what they value;
• listen to the answer; and
• act on the feedback.