Leadership for the greater good and responsiveness to key stakeholders

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Leadership for the greater good and responsiveness to society

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Creating value through responsiveness to stakeholders

The Australian Leadership Index (ALI) is a national survey that provides a comprehensive picture of perceptions of leadership for the greater good in the government, public, private and not-for-profit sectors.

The ALI model of institutional leadership for the greater good delineates three sets of indicators of leadership for the greater good that pertain to the type of value that institutions seek to create, how institutions create value, and for whom institutions create value.

For each of these indicators, we measure public perceptions and expectations. In addition to this, we calculate the relationship between perceptions of each indicator and overall perceptions of leadership for the greater good, yielding insights into the key drivers of public perceptions of leadership in the government, public, private, and not-for-profit sectors.

This note is part of a three-part series on the stakeholders for whom institutions create. The focus of this note, the first in the series, is on the extent to which institutional leaders are alive and responsive to the needs of its key stakeholders and constituencies – the people they serve.

A note on the survey process

The results reported in this research note are the average of the results obtained from quarterly ALI surveys (1,000 people per quarter) between September 2018 and March 2020, which represents seven quarters of data collection. 

Respondents are recruited via an online panel by Dynata and recruitment is designed to ensure that the sample is nationally representative in terms of locality (i.e., States and Territories), gender and age.

Results are analysed at the overall national level, as well as at the sector (i.e., government, public, private and not-for-profit sectors) and institution-level. ALI results can be further segmented according to a range of demographic variables. More information about the survey process can be found here and the ALI data portal can be found here.

What is the relationship between responsiveness to key stakeholders and leadership?

One of the many factors that makes leadership complicated is identifying the stakeholders whose interests ought to be considered in any given decision or course of action. The growing appreciation of the need to consider the interests of specific communities, society-at-large and future generations further complicates the work of socially responsible leadership.

What role do public perceptions of leaders’ responsiveness to the needs of key stakeholders play in public perceptions of leadership for the greater good in the government, public, private and not-for-profit sectors?

ALI research reveals that public perceptions of responsiveness to key stakeholders is a strong predictor of leadership for the greater good in the government, public, private and not-for-profit sectors. This means that the more institutional leaders are perceived as responsive to key stakeholders, the more they are perceived to show leadership for the greater good.

Responsiveness to key stakeholders at the sector-level

Having established the relationship between responsiveness to stakeholders and leadership for the greater good, it’s pertinent to consider what ALI reveals about perceptions and expectations of responsiveness to stakeholders in the government, public, private and not-for-profit sectors.

The public have high expectations of the degree to which institutions in the government, public, private and not-for-profit sectors should be responsive to the needs and interests of key stakeholders. Roughly two-thirds of respondents expect the government, public, private and not-for-profit sectors to be responsive to stakeholders to a “fairly large” or “extremely large” extent.

The public sector and not-for-profit sector are regarded as the strongest performers in terms of responsiveness to key stakeholders, with 38% of respondents judging both sectors responsive to stakeholders to a “fairly larger” or “extremely large” extent. Consistent with this, the not-for-profit sector is also associated the smallest gap between perceptions and expectations of responsiveness to stakeholders. Although the public sector is well regarded in terms of their performance, the public have somewhat higher expectations of their responsiveness to stakeholders; thus, the public sector is associated with a 35-percentage point gap between expectations and perceptions on this criterion.

The government sector is seen as the weakest performer on this criterion, with only 24% of respondents regarding the government sector as responsive to stakeholders to a “fairly large” or “extremely large” extent. Consistent with this, the government sector is associated with the largest gap between perceptions and expectations (47-percentage points).

The private sector is perceived more favourably than the government sector, but less favourably than the public and not-for-profit sectors. 31% of respondents regard the private sector as responsive to stakeholders to a “fairly large” or “extremely large” extent. Paired with the lowest expectations from respondents, the private sector is associated with a gap of 35-percentage points between perceptions and expectations.

Figure 1. Perceived and expected responsiveness to key stakeholders, sector-level, Sept. 2018-March 2020

Figure 1. Perceived and expected responsiveness to key stakeholders, sector-level, September 2018-March 2020

Explore this data for yourself via the ALI custom chart builder.

Responsiveness to key stakeholders at the institution-level

Charities are regarded as the strongest performer in terms of responsiveness to key stakeholders, with 51% of respondents judging charities as responsive to a “fairly large” or “extremely large” extent. Consistent with this, charities are also associated with the second-smallest gap between perceptions and expectations of responsiveness to key stakeholders (26-percentage points).

Although charities are associated with the most favourable public perceptions of responsiveness to key stakeholders, public health institutions are also well-regarded, with 43% of respondents viewing these institutions as responsive to key stakeholders to a “fairly large” or “extremely large” extent.

However, perceptions of charities differ markedly from the two other institutions that comprise the ALI measure of the not-for-profit sector; namely, trade unions and religious institutions. Trade unions and religious institutions are perceived by only 32% and 31% of respondents, respectively, as responsive to stakeholders to a “fairly large” or “extremely large” extent.

A similar pattern is observed for the institutions of the private sector. National businesses and multinational corporations are viewed by 27% and 26% of respondents, respectively, as responsive to key stakeholders to a “fairly large” or “extremely large” extent. Consistent with these, the institutions are associated with some of the largest gaps between perceptions and expectations. By contrast, the public expects considerably less from small and medium enterprises (SMEs) than other types of business and evaluates SMEs more favourably, which produces the smallest perception-expectation gap of all institutions measured by ALI.

The institutions of the government sector are perceived as among the worst performers in terms of responsiveness to key stakeholders. The Federal Government is perceived as the least responsive to stakeholder needs, of all institutions measured by ALI. Specifically, only 21% of respondents view the Federal Government as responsive to stakeholders to a “fairly large” or “extremely large” extent. Consistent with this, the Federal Government is associated with the largest gap between perceptions and expectations (50-percentatge points).

State Governments do not fare much better. Only 24% of respondents view State Governments as responsive to stakeholders to a “fairly large” or “extremely large” extent. This, in conjunction with high expectations of State Governments, creates the second largest gap between perceptions and expectations (48-percentage points). Local Government are perceived somewhat better than Federal and State Governments – 26% of respondents view Local Governments as responsive to stakeholders to a “fairly large” or “extremely large” extent. Combined with high expectations, local governments are associated with the third largest gap between perceptions and expectations (43-percentage points).

Figure 2. Perceived and expected responsiveness to key stakeholders, institution-level, Sept. 2018-March 2020

Figure 2. Perceived and expected responsiveness to key stakeholders, institution-level, September 2018-March 2020

Explore this data for yourself via the ALI custom chart builder.

Please note that full details about public perceptions and expectations of responsiveness to key stakeholders in government, public, private and not-for-profit sector institutions are provided in the ALI 2019 Annual Report, which is available here.

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About the Australian Leadership Index

The Australian Leadership Index is a national leadership survey that provides a comprehensive picture of leadership for the greater good in Australia. Made possible by the generous support of the Graham Foundation, the Australian Leadership Index is nationally significant for a number of reasons.

It is the largest ever study of leadership for the greater good. Each quarter, the ALI surveys 1,000 people across Australia about their beliefs about leadership for the greater good by Australian organisations and institutions. The ALI also reveals how institutions in different sectors vary in terms of leadership for the greater good, as well as the drivers of these perceptions, revealing new insights into what institutional leaders can do to show leadership for the greater good. Finally, by making all ALI data freely available via the ALI data portal, the Australian Leadership Index provides the public, journalists and leaders with a powerful new tool to help bring forth the leadership Australia needs for the future Australians want.

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