Multi-Stakeholder Initiatives: An Avenue to Improved Performance
Over the last couple of decades, the landscape of corporate responsibility has seen an increase in the use of multi-stakeholder initiatives (MSIs) as a means of solving problems through comprehensive and collaborative action. Some of the better known MSIs include the Better Cotton Initiative (BCI), the Ethical Trade Initiative (ETI) as well as the Multi-Fibre Arrangement (MFA) Forum. More than ever, we're seeing a growing number of entities turning to multi-stakeholder initiatives as a means of demonstrating their commitment to ethical values (social, environmental or governance) and collaborating to find solutions to difficult and sensitive industry issues.
MSIs first gained traction in the late 1990s as a response to "governance gaps", (e.g., governance policies and processes) and as a means to solve problems through collective action. MSIs, such as the MFA Forum, are based on voluntary engagement from committed members with the objective of establishing common goals and standards to address a broad range of environmental, social, financial, ethical and governance issues.
If carefully assembled, the MSI model provides companies, NGOs, academics, investors and other stakeholders a space in which to engage on specific issues. Selecting stakeholders is a critical part of the process requiring skill, diplomacy and effort. Assembling the right group of stakeholders is essential to the initiative's credibility and legitimacy, with each partner having an equal voice, a commitment to transparency and acceptance of the needs of all partners to achieve mutual benefit.
Engaging with a diverse mix of stakeholders through a quality MSI model offers many benefits:
- Transparency increases the credibility of the participating organisation and the industry as a socially responsible corporate citizen.
- Stakeholders can share specific, in depth knowledge and resources that can provide broader perspectives and add value to decisions.
- Engagement allows decision-making and responsibilities to be shared, thereby reducing the risk faced by individual organisations when acting alone, and strengthening the message that the MSI seeks to communicate.
Despite the rising number of multi-stakeholder initiatives in recent years, challenges remain. For instance, it's not always easy to bring stakeholders to the table. The process itself requires time, commitment and a willingness to learn by all parties in order to be effective and worthwhile. Many initiatives seeking to promote responsible business, such as the UN Global Compact, have come about as a result of stakeholder engagement and broad-based representation.
In demonstrating inclusivity of stakeholder groups and views, MSIs like the BCI, ETI and the MFA Forum, are able to respond with collective action to the pressing issues in the industries in which they operate. Influencing public policy, strengthening networks between stakeholders, aiding in conflict management and providing solutions to industry concerns are just some of the positive outcomes. Organisations that choose to invest time, money and engage in good dialogue with stakeholders are more likely to achieve sustainability and improved performance.
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