The discipline of public affairs is changing
The fundamental focus of public affairs has always been on ensuring legislation and regulation deliver what is intended, and that they do not have negative impacts. And it has mostly happened out of sight of the public gaze. It would be easy to say that’s because public affairs is a dark art. But, a few cases aside, it’s more because much of the work is highly detailed and of little interest to wider audiences.
The change is being driven by the general public, who are taking a much closer interest in companies’ activities, in turn putting different expectations on the people they buy from. Not long ago, the entire consumer focus was on the quality and price of goods and services: basically, value for money. Now, environmental and social policies are also a focus. What is Company X doing to improve the sustainability of its products? How is Company Y handling its gender imbalance? What is Company Z doing to support its local community?
This was the focus of our discussion at the Public Affairs Council last month, examining the future of public affairs. Doug Pinkham, President of the Council addressed a meeting that we hosted in Geneva examining how things are changing, in particular around the key capitals of influence: Brussels, Geneva, London and Washington DC.
One very clear trend is that public affairs is, necessarily, rising up the corporate agenda, driven by the ultimate boss: the buying public. It takes time for consumer demands to penetrate the corporate world but it does happen in the end, especially when those demands are backed up by regulations. And regulations around sustainability reporting, for example, are coming soon and they will force significant change.
This presents a major opportunity for public affairs practitioners to play a much more strategic role, in particular aligning corporate policies and practices around the risks and opportunities created by the changing sustainability and regulatory landscape. The flip side of that is using the corporate experience to shape future regulations.
A key question that arose during discussion was whether the right resources are in place to enable public affairs functions to take their rightful place. The concern is that the past of underfunding public affairs is having a negative impact on the present and future. Do we have the right people in the right places? There is certainly an urgent need to build up the right skillsets to meet the new requirements.
What does a future-proofed public affairs function look like?
The first and most important dependency is that it reports directly to the CEO. This is now a mission-critical function that demands a seat at the top table: public affairs can no longer be in the shadows. With that comes new levels of responsibility.
The public affairs function needs expertise in policy, as it always has, and digital communications. It also needs to add formalised risk and foresight planning, working at the point where political and regulatory risk impact on corporate risk decision-making.
In turn, political and regulatory risk factors increasingly require corporate change. Therefore, public affairs practitioners need to have a deep understanding of corporate culture. And they need both the remit and the skills to drive the necessary changes.
Organisational changes are also important. On one dimension, public affairs needs to work in a matrix of global and regional functions, reflecting the reality of the complexity of political and regulatory decision-making. Inevitably, this requires some balancing of resources to ensure the most significant threats are addressed. Going back to my point about risk, it also means having the expertise to recognise those risks, which in turn means have the intelligence networks in place to know what is actually happening and not be caught by surprise.
Internally, public affairs can be most effective when it is aligned with other external-looking functions. Communications is the most obvious one. But so are sales, procurement and supplier management, for example. They are all useful sources of intelligence as well as communications networks.
We are not seeking to present a blueprint for every public affairs department. That would be an impossible job: each is unique. It’s more about recognising that the role of public affairs is changing rapidly. And the Council is very well-placed to have that overview, with its long history of supporting the industry.
We are very pleased to bring the European perspective and in particular multilateral approach that is so visible in Geneva. During our discussions around last week’s meeting, it was very striking how many similarities there are between the US and Europe, emphasising the importance of a global public affairs function.
What is abundantly clear and universal is that there is significant risk in not reacting to the changing public affairs role.
Managing Director / Deputy CEO, based in Geneva
Lukasz is Managing Director for Switzerland, Belgium and UK offices as well as deputy CEO for Leidar. He oversees key international client projects and relationships. In addition, he manages external partnerships and memberships of Leidar.