In the latest in the Thought Leaders series, Hendro Poedjono, Corporate Affairs Director, FrieslandCampina Asia, explores the close connection between engaging stakeholders and driving effective corporate citizenship
How has stakeholder engagement changed for corporations operating in Asia Pacific in the last decade?
In the same way that the global environment has so radically changed over the past 10 years, stakeholder engagement has also changed. No business nor its operating model has been immune to the megatrend that has forever changed our way of life – the advent of the digital age – but we do still need to remain conscious of the nuances of the many countries we work across as regional businesses.
Few regions have been as immersed in this sea-change as Asia-Pacific. With internet and mobile penetration at such high levels, the expectation is for instantaneous access to information. This has meant that we now find ourselves in a position where we need to share content in a more open, more deliberate way.
For all of us who work in corporate or public affairs, the onus is on us to communicate and operate in a way that is transparent. The ‘why’ has to be apparent in order for a corporation to be perceived as accountable or even authentic. This allows individuals both inside and outside an organisation to understand a business’ approach and purpose to its mission. Adopting a reactive posture cannot be the modus operandi of any business that needs to work with external entities.
FrieslandCampina uses its engagement with stakeholders to both execute and promote your CSR and shared value initiatives. How do you calculate who to engage and when?
We understand that there are serious global challenges – the need to end hunger and poverty; as well as the need to promote health and well-being. These challenges are far reaching enough for the United Nations to include them in the Sustainable Development Goals (SDGs). Conscious of this need, and given the breadth of our work around the world, we know that we have a responsibility to address these issues and that is what shapes our engagement strategy.
The need for multi-stakeholder partnerships, also codified as one of the SDGs, provides the backdrop for this. FrieslandCampina works on an ongoing basis with all the various stakeholders across our entire value chain. This means working with a wide range of partners that range from non-governmental organisations that support farmers’ rights and agricultural sustainability, to health promotion authorities, government ministries responsible for health and education and many others.
We start from the very beginning of our value chain – we intervene to help promote sustainable livelihoods for the farmers who produce the milk we require for our products. This extends through the distribution chain, and on to consumers in society where we promote food and nutrition security amidst the complex backdrop of providing enough food for an increasing global population.
The shift from CSR to shared value recognises the importance of long-term, strategic programmes which both contribute to society’s goals and to the business. How responsive are your key stakeholders to this approach?
While seeking to attain perfect alignment is always be a work in progress, our approach in wanting to create both value for ourselves and each of our partners has meant that our goals have naturally become aligned with those of our stakeholders.
This had made all the difference as we know that we are working for and in each other’s interests. Our partners have responded positively and we have deepened our relationships through this. It helps that, more often than not, the effort that we all put in can improve the livelihoods of individuals within a community.
Through our Drink.Move.BeStrong initiative across several South East Asia countries, where we seek to encourage young children to combine nutritious diets with an active lifestyle, we work with health and education authorities, who in their own capacities, also seek to strengthen the importance of such a message to children and their families. Together, our efforts amplify the results.
From a more business focused perspective, in Vietnam for instance, where FrieslandCampina has been operating for 20 years, our operations have expanded in tandem with our efforts to help build the capacity and ability of local farmers to produce safer and higher quality milk. So our aspirations align, and we place great importance on such partnerships to ensure that we are on track to achieving each of our goals.
Business today must be more responsive to all its stakeholders: ranging from shareholders to consumers. How has this proliferation impacted the way you communicate? And what impact has social media had?
Building on what I have mentioned earlier about how organisations need to be proactive, social media has added a whole new dimension to the way we communicate. It allows for rapid engagement, and gives us an additional avenue from which we can share the progress and impact of our efforts. It provides a sense of reality when you share how a CSR programme is working on the ground, and social media is extremely effective in allowing you to showcase something of that nature in a highly interactive and engaging way. It makes the difference when engaging with young people who are so plugged into social media when you communicate in a medium they understand and for them to see that the work you do will have a direct impact on future generations.
Another important way in which social media has impacted how we public affairs professionals communicate is that it is a two-way channel. I’m not just referring to ‘impressions’ or ‘likes’, which may help you to get greater exposure for your message. To some extent, it provides businesses a chance to mitigate risk and also horizon scan by understanding what can influence consumer sentiment. When something does go viral, it trends because people are moved, in some way by what they have seen. And this is the real challenge for us – to really understand ‘why’ we are doing what we do and making sure it is something that truly effects the outcome we want. I won’t call it scrutiny, but social media’s prevalence has meant that we need to constantly improve what we do, so we can become worthy of the public’s and our stakeholders’ trust.
Can you offer one example of where FrieslandCampina has successfully blended its stakeholder management with your drive to create shared value and be a strong corporate citizen?
Balancing stakeholder management with a desire to be a good corporate citizen is by no means mutually exclusive. For FrieslandCampina, we have found this balance in the execution of our CSR initiative, the Dairy Development Programme.
Working with more than 45,000 smallholder dairy farmers across Asia, we enable these farmers to run their business in an optimal way, and at the same time, raise the quality and quantity of the milk they produce. Partnering entities from business, government and society, and also leveraging our 140 years of dairy expertise, we give farmers access to training, finance, farmer exchange programmes. Also, through the establishment of dairy development villages and zones, as well as local milk distribution systems, we strengthen the capacity of the farming industry and make the profession sustainable for the next generation.
So working through these public-private partnerships, we fulfil our responsibility to communities in the region. We create value for our business, our partners and our customers. This approach of doing good business and doing business for good will continue to define the way we operate as a good corporate citizen.
How complex is it managing and implementing effective – and truly two-way – stakeholder engagement across a region so diverse?
With multiple emerging markets spread across the region, the dynamism of the Asia-Pacific is only made more acute by its diversity. Differing regulations and operating environments, further characterised by social and cultural nuances means that a one-size fits all approach would likely not produce the outcomes you want.
By seeking goal alignment, and by understanding each local context well, which is an awareness you can only develop through working with local stakeholders across all parts of your value chain; you can then fine tune your broad plans into something that works for a specific market.
When a company sets out to Create Shared Value it’s also sharing its reputation – for good and bad. How important is it to leverage stakeholder relations to drive positive brand value, and how effective is FrieslandCampina at doing so?
Quite fundamentally, the quest to create shared value needs to be more than a way of addressing the desire to generate consciousness about a business or its products.
When we work with stakeholders, it achieves something far more important – it gives us, and the organisation a mandate, a ‘license’ to operate in a particular market. This sets FrieslandCampina apart from our peers. Our work with various stakeholders across government, civil society and even farming organisations is based on the basic premise of wanting to implement programmes on the ground that have real socio-economic impact.
In Indonesia, we are supporting the national goal of increasing its fresh milk production supply. Through dairy villages and zones around the country, we are providing education, training and investment to the smallholder dairy farmers who are so vital to achieving that target. Such an effort is only possible because we work with local governments and NGOs to effect such an initiative.
By partnering with stakeholders, we gain an understanding of local realities and expectations. We build legitimacy for ourselves in the domestic market and ensure that what we do, not only from a public affairs or CSR perspective, as well as from a business standpoint, can meet the demands and needs of consumers and partners.
Hendro Poedjono is Corporate Affairs Director, FrieslandCampina Asia
The Thought Leaders Series is Supported by FleishmanHillard
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