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What’s engagement worth to the stakeholder?

Aleksandra Dobkowski-Joy recently posted this thoughtful piece on her blog:

Stakeholder engagement: pay to play?

As more companies put together stakeholder panels to provide ongoing input into sustainability strategic planning and reporting, the question arises: should stakeholders be paid to play?

Many of these panels are composed of well-known experts—in SRI, in supply chain, environmental issues, etc. These individuals have spent years in the field developing their knowledge base… which is precisely the reason their feedback can be a valuable reality check for companies (for example, see: Symantec’s Stakeholder Advisory Council or GE’s Expert Advisory Panel.)

So it seems apparent that there needs to be a way to appropriately compensate “stakeholders” for time and effort in providing counsel and advice. At the same time, companies need to protect against the perception of co-option or bias that a paid relationship might engender.

There are a variety of approaches currently in play: payment for travel and lodging, an “honorarium”, a contribution to a charity of choice, etc. I find all these to be somewhat limited, however, when you consider that the “stakeholder” is still putting hours towards an engagement that could otherwise have been spent in “paid” work.
So: what’s the best approach? How should companies disclose payments to stakeholders?”

Aleksandra asks some important questions. Obviously, for tenured academics, or NGOs with secure budgets, this engagement can be part of their everyday work. But what about for others, for whom it is an extra call upon their time? I am not sure of the right answer, but here’s the response I posted on her blog:

“This is a great point. The honest answer personally is that I don’t know. I used to do the surveys for the £100 to a charity pitch, but then found often the agencies failed to make the donations!

The engagement that takes more than an hour or so (and under an hour or two, is a waste of time) is tough to price. At what point does it become consulting?

I do this kind of paid engagement 12 or so times a year and I look at it on the basis of pricing time.

What is my time worth for the 12 days a year I have free to do this kind of engagement? So I work out what it’s worth, including preparation, and price it that way.

If the company wants my views, for a half, or full day, (and I factor in travel too, you have to), then it’s priced accordingly.

That’s the solution I have worked out. The potential ‘bias’ problem is an issue, but my view is that I usually only do this for the company once a year, or just once only, so they are paying for honest views, and I’m not looking for an ongoing gig, so that’s not a big problem.

Secondly, they should value honest feedback, and it’s not useful for them, to tell them what they want to hear. Not perfect, but the best I have come up with!

It does tend to sort out the time wasters with no budget (and no real interest in feedback) from the serious firms. Discuss!…”

Aleksandra and I would be very interested in your views…

3 Comments

  1. hi, I agree with Aleksandra (I usually do, she's great!).

    Stakeholder input from independent professional people is a service which is of value precisely because such professional people or consultants invest great efforts in buildng their own knowledge and professional expertise. Imparting this knowledge is what they do for a living. Participating in a stakeholder panel or sitting on an advisory board for a for-profit corporation is no different.

    There is never a no-bias situation whether or not the panelists are paid. EVERYONE comes to these things with a certain precoding. However any professional consultant ALWAYS says whats true from their perspective and not what will make the client look good. Chances are that someone who is on an advisory board is precicely there because of their professional integrity and reputation for adding value not just being a yes-woman.

    Having said that, most of these boards do not include professional consultants, as far as I know. They tend to include other business people, civil society or academic reps who earn a salary, no matter where they spend their time. If a company wants the view of a consultant, why not just hire then as a consultant ? They can still participate in panels with other external stakeholders but then the relationship is clear.
    elaine
    http://www.csr-reporting.blogspot.com

  2. … and the discussion continues!
    Read additional comments at http://www.frameworkcr.com/blog and at the Global Reporting Initiative Linked-In Group http://linkd.in/cXLdGW

  3. Helen Seibel

    This is an interesting discussion. There seem to be more and more independent consultants emerging in this field – having moved from corporate roles or cut their teeth at agencies and associations and built up a few years of experience. I believe the knowledge they have amassed definitely has a value. If an NGO is asking for a voluntary position with a formal terms of reference, then I do think that's a bit different. Becasue connecting with the right NGO can offer more credibility and more value to the consultant / stakeholder.

    On a slightly separate note, there has been a somewhat vivid debate in the media here about hospitals and universities using taxpayers dollars to pay for consultants. To be completely transparent, I have not read about this in depth, but at the very least, it's thought provoking. Here is a recent article:
    http://www.theglobeandmail.com/news/national/ontario/ontario-liberals-vow-to-stop-public-dollars-being-spent-on-lobbyists/article1744505/

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