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IAI Actuarial Core Principles · Business Management · Communicating strategy; culture and structure in decision making; strategy case studies

A newly appointed strategy head at an Indian reinsurance company wants shareholders, employees and regulators to all understand a new strategy of focusing on niche crop and climate risk cover. Which action best reflects good practice in tailoring communication to stakeholders?

Keep the core message the same for everyone but adapt the emphasis, detail and channel to each group, for example returns for shareholders and role changes for employees. This meets different information needs while avoiding contradictions, which supports understanding and trust across stakeholders.

  1. AUse one identical long document for every group, as tailoring risks inconsistency
  2. BKeep the same core strategic message for all groups, but adjust the emphasis, level of detail and channel to each group's interests, such as returns for shareholders and role changes for employeesCorrect
  3. CCommunicate the strategy only to shareholders, since they own the company and the other groups will learn of it through them
  4. DGive the regulators a simplified version and give employees the detailed version, since employees implement the strategy
  5. Communicate verbally only, to avoid creating a written record that might be used against the company

Explanation

Effective communication keeps one consistent core message while adapting emphasis, detail and channel to each stakeholder's concerns. A single identical document ignores differing needs, and excluding groups leads to misunderstanding. Avoiding written records reduces transparency.

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