Stakeholder Engagement: Building Stronger Relationships

Effective stakeholder engagement is a cornerstone of good corporate governance. It involves regular and meaningful interactions with stakeholders to understand their concerns and incorporate their feedback into corporate strategies. In 2024, Bursa Malaysia introduced new guidelines to enhance stakeholder engagement practices among listed companies.

Key Updates : The updated guidelines, published in April 2024, emphasize the need for companies to:

• Conduct regular materiality assessments to identify and prioritize issues that matter most to stakeholders.

• Establish clear channels for stakeholder communication and feedback.

• Report on stakeholder engagement activities and their impact on corporate strategies.

Research Insights : Research shows that companies that excel in stakeholder engagement tend to perform better in terms of reputation, risk management, and overall corporate governance. Engaging with stakeholders helps companies identify emerging risks and opportunities, align their strategies with stakeholder expectations, and build long-term trust.

Implementation Strategies : To enhance stakeholder engagement, companies should:

• Conduct comprehensive materiality assessments every three years, with annual pulse checks to ensure the relevance of identified issues.

• Utilize virtual and hybrid meetings to engage with stakeholders, especially in the post-pandemic world.

• Develop a robust stakeholder engagement plan that includes regular communication, feedback mechanisms, and transparent reporting.

Conclusion : Effective stakeholder engagement is essential for building trust, managing risks, and enhancing corporate governance. By proactively engaging with stakeholders, Malaysian companies can ensure that their strategies are aligned with stakeholder expectations and create long-term value.