Benjamin Colton is the Head of Asia-Pacific, Asset Stewardship at State Street Global Advisors. This post is based on his recent paper as a graduate student at the London School of Economics and Political Science.
Levels of engagement between public corporations and certain stakeholders have increased in recent decades. Shareholders more frequently address environmental, social, and governance matters and customers express their viewpoints at lower costs and with higher amplitude than ever before. Although companies are more regularly considering the perspectives of key external stakeholders, it is important that they also listen to the voice of their own employees.
Employees and the human capital they provide are central to the sustained success of a company. Whether they work in business lines, interact with end customers, or develop products, employees possess insights about their company that can be difficult for management to ascertain. The perspectives of employees can provide leadership with information valuable for improved decision-making and organizational efficiency. When silenced, employees may become unsatisfied and leadership may not receive critical information, thereby increasing the organization’s exposure to high impact risks.