Why do we need stakeholder engagement?

Legal and regulatory reasons

Principle 3 of the revised Code for Sports Governance requires that

‘organisations shall be transparent and accountable, engaging effectively with stakeholders and nurturing internal democracy’.

Requirement 3.3 further states that

‘Each organisation shall develop and deliver a strategy for engaging with, and listening to its stakeholders (including elite athletes where appropriate). The Board shall annually review and monitor its delivery’.

The Code explains that transparent, clear and honest communication is essential to leading and representing others successfully, helping to build trust, particularly where stakeholders (including the public) have an active interest in the activities of the organisation.

The Companies Act 2006 gives an indication of some of the stakeholders to be taken into consideration when directors are making decisions. s. 172 requires that, while boards have an overarching duty to promote the success of the company for the benefit of its members as a whole, directors should have regard to:

a) the likely consequences of any decision in the long term,
b) the interests of the company’s employees,
c) the need to foster the company's business relationships with suppliers, customers and others,