services & publications

Public affairs and corporate communications
by Andrew A. Napier, Director, Prosequence Ltd
Associate Fellow, European Centre for Public Affairs (ECPA)
published in "Everything flows: Essays on Public Affairs & Change"

Far more people are involved in Public Affairs than many company specialists care to admit. 

After 20 years of working for international organisations and seven years consulting, I have come to see Public Affairs as “understanding and influencing the economic, social and regulatory context in which (our) business operates” and – in one way or another - this is what NGOs, the media, local communities, politicians and officials, employees, consumers, the financial community and other business partners and stakeholders try to do, as well as one’s own business.

Effective public affairs for businesses also means interacting with other parties whose interests may coincide or conflict with one’s own, and whose attitude and actions could have an impact on the success or failure of one’s plans. 

The close co-ordination of Public Affairs with other ‘corporate communications’ is particularly important for businesses undergoing strategic change – such as restructuring, mergers and acquisitions – and when facing serious external challenges.  Consistent messages and matching action are essential.

Landmarks Publishing - "Everything Flows: Essays on Public Affairs & Change" and corporate communications

Landmarks Publishing, Brussels, ISBN 90-74373-19-4

This corporate communications aspect of Public Affairs has taken on an even greater importance for many businesses operating internationally in today’s rapidly changing and unpredictable world – with its 24-hour news cycle and with the telecommunications revolution enabling all parties the possibility of instant global communication of information and opinion.  The chances are that others may also be pushing for change, in different directions – and maybe more effectively!

Indeed if one steps back and looks at the big picture there is usually a whole web of cross-influences: stakeholders, NGOs, business and even politicians and officials trying to influence each other and get favourable coverage in the media.  As well as one’s own finely-honed messages, MEPs, the European Commission and governments see, hear and read about what business does and says, and match it against their own agendas.

As with most things, there is the general and the specific.  In general, the list of EU/business issues includes:

  • international competitiveness of the EU versus the Rest of the World
  • external trade and tariffs
  • EU enlargement and the integration of new markets
  • completion of the EU internal market
  • competition policy
  • regional development and subsidies
  • infrastructure
  • employment, health & safety and other social affairs
  • consumer protection
  • taxation and other fiscal and financial matters
  • data protection
  • corporate governance and corporate social responsibility
  • sectoral issues

Some of these are specifically aimed at business, but many are not.  They can however all have predictable implications for most businesses.  For some businesses – especially those headquartered outside Europe– there is also a requirement for their Public Affairs specialists to help them understand European political and legislative processes and priorities.  (Particularly important in Japanese and American companies, as in their home countries business/government interfaces can be very different to Europe .)

The challenge for every business is to deploy its resources in the most effective way for it to prosper.  The Public Affairs and Corporate Communications functions are no exception: to understand and influence the economic, social and regulatory context in which one can operate, one has to be able to prioritise, focus and chose the best channels. 

Prioritisation

I have always started with two checks, which for want of a better description I call general/specific and contextual/inter-active

The first asks whether issues are specific to a company or has particular strategic significance for it, or whether the issues have a particular importance for all companies in a particular sector or whether the impact could be industry-wide. 

There are different bodies that deal with these different levels of issues, and it is usually advisable to focus one’s efforts – and to engage with others – on issues where there is a strategic or competitive importance. 

In this regard, a benchmarking study which I conducted of Public Affairs in Europe showed the ‘best practice’ companies even trying to put a dollar figure on the potential strategic impact of various external issues.

The second prioritisation check seeks to split out those issues that can impact the business into the contextual issues (“we should be aware, because they may have an impact, but we probably cannot influence them”) and the inter-active issues (“may have an impact and can be influenced by what we do and say.”)  [see chart]

This sort of focus is at the heart of all ‘best practice’ Public Affairs and issues management, whether in a business, a campaigning NGO or other interest groups. 

issues management - setting priorities

Management systems

Different organisations set up systems best tailored to their way of working, but there are generally six phases on a permanent loop:

  • monitoring, forecasting and reporting
  • impact analysis and prioritisation
  • planning and strategy
  • ‘creative”: agreeing messages and tactics
  • action and communication
  • feedback

The best Public Affairs and Communications people can see their organisations in multiple contexts at once and can explain clearly how future changes in the business environment can present challenges and opportunities for their organisations, and they can explain this in ways that resonate with the people with whom they are talking.  This includes interacting at all phases with others inside the company who have an interest in how the issues pan out, and often having a seat at the company’s top table – or at least a direct line through to the chief executive.

Relationships

Within each business these relationships will differ, but there are some relationships which regularly show up.  For example the Public Affairs and Legal functions are often closer (or the same) in many US-owned businesses, maybe because of the extra-territorial reach of many American laws, the practice of ‘progress by litigation’ or the generally litigious nature of the USA .  Some of this may be crossing the Atlantic eastwards, but in my view the conditions in Europe are currently different in that no European country yet has the full American blend of class actions, contingency fees, the loser not having to pay the winner’s costs and personal injury lawyers contributing to the election funds of judges (as well as politicians) seeking election.

The Public Affairs/ Legal link can be very effective, but often needs a strong counter-balance from the corporate communications/PR function.  What may be legal may not be acceptable and could even be counter-productive: in one high-profile case which interested consumer groups, national governments and the European institutions, a prominent US-owned company was told by the British government’s Monopolies and Mergers Commission that what it had done in its then main European market “was not against the law but was against the public interest”, and the British government and the EU then proceeded to tighten the laws that the company had used to justify its behaviour.

In the international companies in which I have held senior Public Affairs positions, co-operation between my department and Legal worked very well and was based on the principle “until it becomes law it is our responsibility and when it does it is yours, but let us exchange views all the time.”  In all companies the Legal department also has a special interest in some issues of concern to the EU and national governments, including company law, competition policy, intellectual property rights and other areas of importance to business.

In the same way Sales and Marketing people have to be aware of and involved in consumer protection issues, Human Resources departments in employment and health & safety issues, and so on.  It appears that inter-departmental co-operation on public affairs issues and the public affairs aspects of major projects is more important than ever in today’s slimmed-down, ‘right-sized’ businesses, where there are often barely enough people to run the day-to-day core business.  This is one reason why I no longer just offer consulting and interim management services in my own specialities of communications, public affairs and issues management: through my ‘network company’ Prosequence we can also call on the consulting and interim services of other specialists to help clients solve complex business issues and plan and deliver strategic change.

Corporate communications and public affairs

I suspect that today’s world of instant global communication will lead more and more companies to go for ever-closer links between the Public Affairs and Corporate Communications functions.  Sometimes it is even best to approach it from the perspective of corporate communications and relations.  For example:

Corporate communications

4internal

4external 4governments, NGOs etc

4media 4 corporate 4financial
4CSR, reputation etc

4product, brand etc

However numerous benchmarking studies have shown that in ‘best practice’ companies – especially those undergoing change (and who isn't!) – the key relationship for the Public Affairs and Corporate Communications functions is with the Chief Executive.  There are several reasons:

  • the potential strategic significance of changes in the business environment for the company as a whole and for different parts of it 
  • the need for consistent messages across the organisation internally, in its key business relationships and matching behaviour, as mentioned earlier
  • communication with top levels of government and the EU are more credible if made by the business decision-makers rather than staffers.  (This applies at national level as well as European, and so I have usually advocated a twin reporting line for national Public Affairs people – to the national CEO and to the European Public Affairs office.)
  • following the corporate collapses and scandals of recent years, good corporate governance increasingly requires management to be able to demonstrate that they are monitoring and managing non-financial risk as well as financial risk: reputational risk, business probity, environment, labour practices and so on.  In today’s world, failure to do so can rapidly destroy shareholder value as well as employment, pension values and any positive contribution that the company made to the countries and communities where it operated. 

All this is ‘core public affairs territory’, except in those companies where “Public Affairs” still only means lobbying.   How the function is organised – and what outside assistance may be needed, if any – varies from organisation to organisation, and indeed from country to country.  In a dynamic business environment the most appropriate solutions for each organisation can change, and companies, NGOs and consultants can all learn from each others’ experiences.  In this context, it is interesting to note that the European Centre for Public Affairs (ECPA) has in recent years extended its membership to include all three groups, as well as academics and some Commission officials.

In the best practice organisations, Public Affairs has grown in importance and will doubtless continue to do so, and more and more people are – in one way or another – looking to understand and influence the economic, social and regulatory context in which business operates and seeking to minimise risks and gain competitive advantage, wherever possible.  That is what most of us understand by Public Affairs and change. The more change there is, the more Public Affairs expertise is needed.

Andrew A. Napier [ aanapier.com ]