Stakeholder Relationships: Key to a Sustainable Enterprise
Most companies envy the passionate loyalty that Apple customers have for their products, the dedication that Southwest Airlines employees demonstrate without understanding that effectively managing their stakeholder relationships is the key to earning these benefits. Employee engagement and customer loyalty are intangible (non-physical) assets that contribute more to the value of a company than the physical 'things' it owns.
According to research by Robert A. G. Monks and Alexandra Reed Lajoux, authors of Corporate Valuation for Portfolio Investment: Analyzing Assets, Earnings, Cash Flow, Stock Price, Governance, and Special Situations fully 80 percent of the market value of Standards and Poors 500 companies comes from intangible assets. In 2005 Apple's market value was $58 billion. The total tangible assets on its balance sheet -- 19.8 percent of that! 80.2 percent of the company's value was contained in its relationships with its stakeholders.
Each relationship is an intangible asset of the business. As any accountant will tell you, assets can either appreciate or depreciate or hold their value.
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John Friedman, an award-winning communications professional and recognized sustainability expert with more than 20 years of experience, is co-founder and vice chair of the board for the Sustainable Business Network of Washington (SBNOW).
On social media, Friedman is a recognized as a thought leader in CSR, listing among the top voices in CSR by Forbes’ Brandfog. His insights on sustainability issues and strategy have been a regular feature on SustainableBrands since 2008 and have appeared on Ecopreneurist.com, Forbes.com, Vaultcareers, and JustMeans.
When not volunteering his time, Friedman serves as director of public relations for Sodexo, Inc. He can be reached at johnf@sbnow.org, is @JohnFriedman on Twitter and can be connected on LinkedIn and Facebook.
This post originally appeared on the Huffington Post website and can be found here. For more information and posts by the author, visit his profile page here. This post was distributed with full permision of the author.
