Strategies and tools for stakeholder communication

In part one we identified important different stakeholders and examined how the communication flows among them.
But now let’s tackle an equally important question:

who should manage stakeholder communication? 

Should it be the CEO? Should it be a dedicated marketing department or someone else entirely?

In an early-stage startup, the responsibility typically falls on the CEO. A proper marketing department is usually not in place and hence, the CEO often has to manage all sorts of communication, whether–it is related to brand development, pitching to investors, handling customer feedback, or any other kind of communication. At this point, the primary focus is on the business development, and all communication efforts are directed towards this goal.

However, as the startup grows, it may start to build a marketing department that would handle advertising, digital communications, social media and brand development for the business. This transition allows marketing related communication to be managed by specialists, freeing up the CEO to focus on strategic communication with potential customers, business partners or investors. 

Eventually, as the business grows and becomes more structured, it might consider appointing someone specifically to manage investor relations or investor communication and this role might involve conducting zoom calls with investors, creating pitch decks, managing meetings with investors and building the company’s image in front of potential investors. 

So, that summarises who should be communicating.

Now, another important question you might encounter: how do we communicate? and what are the tools for effective communication? 

The tools to be used and their frequency will often depend upon the type of stakeholder.

How Do You Communicate Effectively with Shareholders?

For shareholders, communication tools themselves may be provided by law or specified in the shareholder’s agreements. For instance, shareholders agreements might require quarterly/monthly information statements or audited /unaudited results on a certain periodic basis to be provided to the shareholders. The law will inevitably provide for an annual forum where shareholders can gather and ask questions to the management. Keeping shareholders informed and engaged is crucial and doing so regularly will ensure transparency and build trust.‍

What Are the Best Ways to Communicate with Board Members?

Communication with board members play a pivotal role in aligning the company’s strategic direction and governance with its persistent goals. Board meetings bring together key stakeholders such as the founder, investor and appointed board members to discuss critical matters affecting the company’s performance and future initiatives. The core of this communication strategy involves holding regular quarterly board meetings, with well prepared agendas and detailed minutes. Encouraging one on one meetings with board members is important for addressing specific issues. Also, conducting annual strategic planning and board development workshops or retreats ensures efficiency and alignment with the company’s vision and objectives.

Potential Investors

Startups may not realise this, but potential investors are tapping into every move of fast growing startups. The appropriate communication tools here can be social media, press releases, founder interviews or getting covered in popular blogs etc.

Using these tools carefully can help create a desired image of the business in the minds of potential investors. Then, when you bring a pitch deck to provide detailed information, an investor can relate to the progress. For investors, it pays to build a proper stakeholder communication plan since you want to control how you appear to them.

Employees

Communication with employees can be for various reasons, but the most important one is to align them and keep them aligned to the goals of the organisation as a whole. In this case, the communication tools can be CEO letters, town halls or functional head meetings. The functional heads will, in turn, communicate various developments in their respective areas to all employees in their department. This will ensure that all teams remain aligned with the company’s overall interests and objectives.

Suppliers and Customers

Building strong relationships with suppliers and customers goes beyond transactional communication. Keeping your customers and suppliers informed about important updates and changes is vital for maintaining strong relationships. The communication can be through emails, phone calls, or meetings, newsletters or events organised for partners. Often a lot of business is generated simply by maintaining great relations and keeping the communication ongoing. 

Government

In the early stages, the government will have a limited role as a stakeholder since there is usually basic compliance to be taken care of and government or regulatory agencies are more concerned with actions which can impact the general public. However, where a startup is functioning in a regulated sector itself, such as health or insurance, the government is definitely involved. Communications with government or regulators are either statutorily prescribed or requested by the government itself. The most important point here is to not delay responding to such communications.

Larger Community 

Building and maintaining a positive reputation within the larger community is important for long-term success. Hosting and participating in community events, volunteer programs and local initiatives demonstrates a genuine dedication to social responsibility. It is important to communicate transparently through newsletters, press releases and social media updates so the community knows what you’re up to and how you’re impacting them. Further, you can also implement Corporate Social Responsibility (CSR) initiatives that address community needs like environmental sustainability programs, educational scholarships or health and wellness projects. By using these tools you can create shared value with your local stakeholders.

Managing Conflicts and Crisis

A startup CEO’s life is almost always on edge, balancing conflicting interests like those of early stage investors and later stage investors, both of whom often consider themselves to be the most important and demand attention accordingly. This can become difficult for a CEO to manage. However, both of them are interested in the Company’s profitability and appreciation of their capital. As long as a CEO is able to convince them that the business is on a growth trajectory, it might be possible to achieve this delicate balance.

Handling communication gaps between co-founders can be very challenging. It can hurt egos and create conflicts which, if left unaddressed, can lead to disastrous outcomes like co-founder fallouts or disagreements between the co-founders and investors. Communication between co-founders should be as frequent as possible, through daily huddles or progress calls.

Beyond resolving conflicts, a CEO’s communication skills are tested during a crisis. For instance, let’s consider a scenario where a customer spreads false rumours about the company on social media or if someone leaks confidential information. It is also possible that the company has failed to comply with certain regulations leading to negative opinions about the company. Another example could be if someone files a lawsuit against the company. With this, the entire reputation of the company will be affected.

Communication during such times must be handled diplomatically - neither agreeing nor outright dismissing claims unless the claims are completely baseless. It takes 20 years to build a reputation and just five minutes to ruin it.

To sum up, managing stakeholder communication is an evolving responsibility in a startup’s life cycle. By using the right strategies and tools, startups can navigate the complexity of engaging with stakeholders that help them grow and build long lasting relationships.

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FAQ

Who should manage stakeholder communication in a startup?

Who should manage stakeholder communication in a startup?

The CEO typically owns primary stakeholder communication responsibility, with the board chair managing board-specific communications and the CFO handling investor relations. According to the National Investor Relations Institute, 73% of high-performing companies designate a specific executive for stakeholder communications by Series B funding. Startups should establish clear communication ownership by stakeholder type: executives for investors and board, HR for employees, and operations for suppliers and customers to ensure consistent messaging and accountability.

What are the most effective tools for board member communication?

Board management platforms like Diligent, BoardEffect, and Nasdaq Boardvantage are the gold standard for secure board communications, offering encrypted document sharing, meeting management, and audit trails. According to Deloitte’s 2023 Board Practices Report, 89% of public company boards use dedicated board portals for communications. These platforms ensure compliance with data security requirements while providing real-time access to materials. For early-stage startups, secure cloud storage with controlled access and dedicated email channels provide minimum viable communication infrastructure.

How often should startups communicate with their investors?

Startups should provide formal investor updates monthly or quarterly, depending on funding stage and investor agreements. The National Venture Capital Association recommends monthly updates during the first 12 months post-funding, transitioning to quarterly thereafter. Each update should include financial metrics, key performance indicators, milestone progress, and material risks. Critical developments requiring immediate communication include significant pivots, cash runway concerns below six months, leadership changes, or major customer wins or losses that impact projections by more than 20%.

What information should be included in stakeholder crisis communications?

Crisis communications must include five essential elements: acknowledgment of the issue, factual situation summary, immediate actions taken, timeline for resolution, and designated point of contact. According to Harvard Business Review’s crisis management research, companies that communicate within the first hour of a crisis experience 40% less reputational damage. Stakeholder-specific crisis communications should be tiered: board and major investors receive detailed briefings first, followed by employees, then customers and suppliers. All crisis communications should avoid speculation and commit only to verifiable facts and concrete next steps.

The CEO typically owns primary stakeholder communication responsibility, with the board secretary or governance officer managing board-specific communications. In early-stage startups, the CEO handles investor relations, while the CFO often manages financial stakeholder communications. As companies scale, dedicated investor relations officers should be appointed when reaching 50-100 employees or post-Series B funding. The board chair should oversee communication protocols and ensure consistent messaging across all stakeholder groups.

How often should companies communicate with board members?

Board members should receive formal updates quarterly through board meetings, with board materials distributed 5-7 days in advance. Between meetings, CEOs should provide monthly operational updates via email or board portals, highlighting key metrics, risks, and strategic developments. The NACD recommends maintaining regular informal communication channels, with CEOs contacting the board chair at least monthly. Critical issues requiring immediate attention should be communicated within 24-48 hours of discovery, regardless of the regular meeting schedule.

What are the best tools for stakeholder communication management?

Board management platforms like Diligent, BoardEffect, and Nasdaq Boardvantage provide secure document sharing, meeting management, and communication tracking. For investor relations, companies use Carta for cap table management and investor updates, while Shareworks handles equity administration. Customer relationship management systems like Salesforce track supplier and customer communications. For crisis management, companies should maintain dedicated communication channels including emergency contact lists, secure messaging platforms, and pre-approved communication templates that enable rapid response within critical first hours.

How do you communicate effectively with shareholders as a private company?

Private companies should provide shareholders with quarterly financial updates including revenue, burn rate, runway, and key performance metrics. Annual meetings are legally required in most jurisdictions, with detailed financial statements distributed 15-30 days prior. Use secure investor portals for document distribution and maintain consistent communication templates. Material events such as funding rounds, leadership changes, or strategic pivots require immediate disclosure within 48 hours. Transparency builds trust: companies with regular shareholder communication report 30% higher investor satisfaction rates (PwC, 2023).

What should be included in crisis communication to stakeholders?

Crisis communications must include five elements: acknowledgment of the issue, factual situation assessment, immediate actions taken, timeline for resolution, and designated point of contact. Communications should reach all stakeholder groups within 24 hours of crisis identification, with board members notified first. Use multiple channels including email, company website updates, and direct calls for critical stakeholders. Provide daily updates during active crisis periods, even if only to confirm no new developments. Deloitte research shows companies with pre-established crisis communication protocols resolve stakeholder concerns 40% faster than those without formal plans.

Part of our Board Member Guide — Your go-to resource for board member roles, responsibilities, and best practices.

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