A stakeholder is any person or entity that interacts with your business in a regular and meaningful way.
Regardless of your industry, the most important aspect of doing business in Africa is understanding your stakeholders. You often find that the easiest parts of doing business in Africa are producing, selling and transporting product. In fact, the most difficult aspect of business in Africa is understanding the vast network of stakeholders and understanding how best to approach each and every stakeholder. The failure to deal with each stakeholder group appropriately can often spell the difference between success and failure. RMG Minerals bolsters these connections with strategies that benefit from best industry and international practice and are consistent with international norms and laws.
Most businesses in Africa should consider the following stakeholders …
- Employees:
- In addition to employees being the heart and soul of your operation, employees serve as your first ambassadors to the outside world. Very often the local community, as well as provincial and national governments, will make a determination as to how well integrated into the community you are by simply seeing whether your employees are positive about your operation. This does not mean you throw money at employees. That is obviously a poor strategy. Rather, it is most important that employees view the company as fair, transparent and that you operate in their interest. This is not a money issue in the first instance. It is about non-monetary treatment of promoting respect, safety and security.
- Local Government and Community:
- If your operation is an extractive or a manufacturing facility located in a non-urban area, the local community will play a huge role in developing the company’s reputation in the wider community. In extractives in particular, the local community believes it has rights that surpass the legal rights that are accorded in a convention or contract. This is because the local community views the activities of the extractive company as exploiting the population’s national patrimony. The company is viewed as hauling off valuable resources that have belonged to the people for generations. They will want something in return. Often it is not money or benefits but rather respect and a forum for voicing concerns. The local community must believe that they are better off with you present than they are if you were not there. Failure to achieve this could be fatal to your project. Regular communication is essential to make this happen.
- With respect to urban manufacturing plants or urban service providers, the same is true but to a much lesser extent. The threat of community intervention in your operation is much smaller. Nevertheless, having a strategy to integrate your operation into the local community is important and should not be overlooked.
- Provincial Government:
- The role of the provincial government depends to a large degree upon the role the provincial government plays with respect to the national government. The more separate, the more important it is that the company, if not located in the country’s capital city, develops a close relationship to the provincial government. Very often the provincial government can be an ally to the company and a buffer to national government intervention. Accordingly, it is imperative to develop a strong relationship with the head of the province or state you are in as well as any provincial or state ministers.
- National Government:
- The National Government is always crucial in the establishment of pro-growth investment climates both on a national level and in terms of attracting international industry. Failure to engage here to both facilitate navigating complex international policy and to establish good relationships across National Government entities is a missed opportunity that misses the central role national African governments play in business development across the continent.
- Civil Society, Ethical Investors, and Non-Governmental Organizations (NGO):
- If you mention an NGO or Civil Society visit to a project manager, the reaction is invariably the same. Jaws clench and the expression becomes stern. “We will send Ms.”X” or Mr. “X” (invariably a low level employee not in the loop) to hear what they have to say. Don’t respond.” The NGO asks questions, gets no response, leaves questions for follow up and writes a scathing report about the operation. Of course they do. They have no choice plus, NGOs have an embedded survival mechanism. Find stuff to print or lose funding.
- RMG Minerals Advisors has a different approach to contacts with ethical investors, NGOs and civil society. Be transparent without divulging trade secrets and take your lumps because they will definitely happen. Then open up regular contact with these groups to ensure they receive accurate information for their reporting purposes.