The strategic value of sustainable stakeholder management

Abstract

Purpose

The purpose of this paper is to explore the relationship between sustainable stakeholder management and reputational capital (of banks).

Design/methodology/approach

In‐depth interviews with top executives of global banks, corporations, hedge funds, World Bank, IMF, SEC, ECB and politicians.

Findings

A bank's overall reputation is a function of its reputation among its various stakeholders in specific categories (e.g., product quality; customer service; financial performance; handling of environmental and societal issues; intellectual capital, etc.). Building a name that matters involves maximizing all characteristics. There is a very strong consensus across our research population that sustainable stakeholder management is required. The interviewees selected four outstanding “stakeholder management banks”: Santander (Spain), Rabobank (The Netherlands), HSBC Bank (UK) and Nordea (Sweden).

Research implications/limitations

Building, sustaining and defending a solid stakeholder management reputation is a crucially important aspect of bank management, but it is an area where understanding could be developed much further. The focus of this study is on the strategic value of sustainable stakeholder management. However, superior operational effectiveness is at least as important a source of competitive advantage as sustainable stakeholder management.

Practical implications

The ability of a sustainable stakeholder management reputation to deliver proven value flows straight to the bottom line. It is senior management's responsibility to manage the bank so as to develop and maintain a solid sustainable stakeholder management reputation. The strength of a bank's name depends on how well it has fulfilled its promise to stakeholders over time.

Originality/value

Future leadership in banking will require significant commitment to sustainable stakeholder management. The “reputations to restore” motto provides the main rationale for banks to build a sustainable stakeholder management mindset. In doing so, they preserve market positions, margins, and organizational vitality.

Citation

Klaas Jagersma, P. (2009), "The strategic value of sustainable stakeholder management", Business Strategy Series, Vol. 10 No. 6, pp. 339-344. https://doi.org/10.1108/17515630911005619