Women on Boards
2 Mar 2026
The following article appeared in the Women On Boards newsletter Monday 2 March.
At a recent Stakeholder Governance & Engagement workshop hosted by Advisory Street, with guest speaker Ann Sherry AO FAICD, the discussion centred on a powerful governance reality: stakeholder engagement must be embedded in an organisation’s DNA to support sustainable operations and drive long-term value.
As Sherry observed, stakeholder management and reputation risk are now critical board issues. When organisations get it wrong, the consequences are immediate and far-reaching — impacting share price, employment brand and investor confidence.
Below are key insights for boards seeking to strengthen their stakeholder governance approach.
1. Stakeholder governance is a core board responsibility
Several factors hold boards back from effective stakeholder governance:
Ownership and accountability is often unclear between boards and management
Capability where directors view stakeholder engagement as outside their experience or professional background.
Directors may be unfamiliar or consider engagement beyond their remit.
2. If shareholders are your motivation, stakeholders is how you get there
Too often, boards frame shareholder primacy and stakeholder focus as being in tension. Ms Sherry challenged this as a false dichotomy: “It’s not an ‘either/or’, it’s an ‘and’. The influence of other stakeholder groups has grown substantially over the last 20 years — much more than any other pressure point on companies. If shareholder primacy really is your motivation, stakeholder management is how you get there.”
3. Boards must uplift questioning and get out of the ‘bubble’
Stakeholder engagement requires a “mindset shift” and insight. As Ms Sherry noted, “You can't have insight if you don't talk to anybody. It requires talking to customers, employees at all levels, regulators, and many other stakeholders.”
Boards and executives often operate within an internal “bubble”, hearing curated or positive narratives. Sherry encouraged directors to enter conversations without assuming you already have the answer, and hearing unfiltered external perspectives, rather than relying on internal assurances.
4. Poor stakeholder management leads to sector-wide regulation
When stakeholder concerns are ignored, the issues often escalate to government, resulting in blunt, costly, sector-wide regulation.
Boards should ask: “What is happening across our sector that could land on us next? How would we look from the outside in?”
5. Crisis leadership requires decisive board action
Crisis preparedness is a governance issue. Reputational crises demand swift, decisive leadership. Delay compounds damage.
Strong relationships and strategic alliances with key stakeholders, such as government, are critical so that when something does go wrong, you can at least get in the door.
6. Culture, incentives and risk settings drive behaviour
Some misconduct cases are caused by misaligned incentives, such as prioritising profitability over customer outcomes.
“Incentives need to be meaningful…otherwise nobody’s going to pay attention”, Ms Sherry said.
7. Measurement and accountability is essential
Reputation and stakeholder outcomes need to be embedded in executive scorecards. Boards need to ask what they are measuring and what problem they’re trying to solve — it’s not easy, but it’s doable.
For a deeper briefing tailored to your organisation, contact Advisory Street on (02) 9510 0027 or admin@advisorystreet.com