Getting a business to a better place – the role of Corporate Affairs in an uncertain world

Three things seem certain in the coming year(s); continued uncertainty and volatility, that many businesses will have to reshape their business models and structures (with inevitable job losses), the conduct of business will be intensely scrutinised and held to ever more exacting standards, and the current (relative) positive sentiment towards business and its leaders will be stress tested against an increasingly grim economic backdrop.

Priorities in this environment will vary, but a constant focus on maintaining and building the support, endorsement and good will of their stakeholder base, especially employees and customers, should be one of these priorities for most large businesses. As the Chairman of a FTSE 50 remarked to me last year,

“A stakeholder issue is now a business issue”.

Although this is a company-wide responsibility and activity, there is one function that has a leading role to play in orchestrating and driving this. And that is Corporate Affairs/Communications, more likely to be Corporate Affairs since it normally, though not always, has a wider stakeholder remit.

However this role that corporate affairs plays is by no means fully recognised, and therefore utilised, certainly not to the extent it should be. It is rarely mentioned in corporate affairs director job descriptions and it is only the more enlightened and progressive corporate affairs leaders that have carved out such a role.

Indeed it is not unusual to find senior practitioners who are unable to convincingly articulate the purpose of their role, and therefore, the value they deliver to their business (Watson Helsby is an executive search firm so we have a bird’s eye view of this).

If senior executives, particularly the CEO and HRD, don’t fully understand what the role should and could deliver, and if many of its senior practitioners are sometimes unable to articulate how they create value, then it is not altogether surprising that certain aspects of the function and its leadership role are not always recognised and therefore brought into play. This inevitably caps the value it is capable of delivering.

But these dimensions of the role are worth highlighting now, if only because they will be particularly important for any big, high profile business in the months to come, helping them to a) avoid unnecessary reputation risk and b) manoeuvre itself to a stronger position, or at least a better place.  

Staying on the front foot

We published a report on the corporate affairs function with this title several years ago, but it is probably even more relevant today.

In this connected, multi-stakeholder world of fast changing norms and expectations, organisations must try to stay one step ahead and not get caught off guard, which means they need to remain vigilant and sensitised to the environment around them. A well respected Partner in a global communications consultancy, talking about the needs and concerns of his clients, observed to me that,

“Expectations are changing so fast and the speed at which things come along can catch you off guard. Areas of risk are intensifying and accelerating and companies can find themselves forced into grovelling apologies”. 

“Corporate Affairs has to have a radar on such a broad range of issues and topics and have an informed view of what their company’s position is on a much broader range of societal issues”.

Assuming it has the right leadership and capability, corporate affairs (supported by its consultancies that have pockets of expertise and perspective that the in-house team don’t have), is the antennae of the company, its listening station, monitoring everything from stakeholder opinions and expectations, the political landscape and specific policy issues to societal trends to competitor activity and reputation issues. It ensures that the leaders are sensitised to developments in the ‘outside world’.

 “Corporate affairs directors always have to be thoughtful about the court of public opinion” remarked one consultancy leader to me recently.

Leveraging its external stakeholder relationships, corporate affairs should be running ongoing dialogue(s) with these stakeholders. This dialogue often provides valuable insight into trends, issues, competitive activity. A FTSE 100 Group Head of Media Relations at a leading UK bank once told me that “I will pick up industry stuff that others don’t know”, and, continuing this theme, he said,

“Journalists are a useful group of people that sum up how you are perceived by others and play it back to you”.

The function is well positioned to identify strategic initiatives that will help create positive impressions that can help lead to favourable shifts in supportive stakeholder behaviour, thereby ensuring that a company stays on the front foot gains some competitive advantage.

This listening station facet of the role is often described as “horizon scanning”, “early warning system”, “eyes and ears” or “bringing the outside world in”. Regardless of the phrase used, the insight, advice and data (data is critical, anecdotal evidence rarely suffices at C-suite level) that corporate affairs provides helps a company remain vigilant and sure-footed. It ensures that the business leaders are sensitised to, and aware of, potential issues and the ever changing mood music ‘out there’.  

Intelligence unit

This external environment (‘outside world’) and a company’s position and reputation within it, is not easily decoded, and it is particularly important for those companies operating in heavily politicised sectors with complex policy and regulatory challenges, that it is decoded. Stakeholder perceptions behaviour and expectations, reputation, societal trends and issues, the political landscape/mood, policy issues etc. all need to be analysed and synthesised and then brought to the board in a way that is meaningful and insightful to the business. It is critical that this intelligence and data is factored into board level debate and its purpose ultimately is to help a company make better decisions.

So, over the years the corporate affairs function has evolved, certainly in the bigger multi-nationals, into something that is akin to an in-house intelligence unit, even a reputation think tank.

The more progressive and well resourced corporate affairs functions employ senior researchers/planners and data analysts, and provide insight that both facilitates and frames decision making (and is therefore respected and valued by the respective ExCos) , combining robust research and intelligence with anecdotal evidence, itself a valuable form of intel.

The function also has to be across multiple social media channels (the listening station again), since the news cycle is now minute by minute, 24/7. Indeed the function has a large role to play in determining the overall digital savviness of an organisation. 

“Like a think tank, the function can challenge established assumptions or institutionalised instinct, not with personal  opinions, but with well founded intelligence that clearly demonstrates emerging trends and informs and/or predicts as much as possible the outcomes of big decisions in order to make  a valuable contribution to the strategic debate”.

In our most recent Watson Helsby FTSE 100 Group Corporate Communications/Affairs Director Survey,  we noted that the “most interesting and fastest growing of the specialist teams is a Strategic Planning and Insight team (it has different title, but largely the same remit”).

There is no shortage of communications consultancies with Research and Insight units, as well as specialist consultancies offering different forms of reputation and stakeholder intelligence.    

Whilst some of the data and research is already published and available, audience and issue research has to be commissioned and it is not cheap.  Which is why the function needs a decent research budget – otherwise how will these important issues get robustly discussed at board level and factored into decision-making? The absence of this research is one of the reasons the function is not always represented at executive board level, but with limited budget it is impossible to obtain.

”No data, no legitimacy” as one FTSE 20 group corporate communications director once told me

Contextualising and enabling strategy and business transformation

This segues into the next attribute of the function, making sure that business strategy and business goals, which many companies will be reviewing in light of the changes inspired by the pandemic,  are not considered in a vacuum and that a more holistic, strategic view of how the business moves forward, reshapes and transforms is brought to bear. This thinking has to be contextualised and grounded in the new context– it cannot be divorced from these changed conditions and circumstances, since it is difficult to prosper when you go against the prevailing winds.

As we discussed in our last blog, the purpose of an organisation also has to be connected to the broader context in which a company operates. To quote the blog, “the relentless focus on the outside world enables the function to see the contribution that a clear purpose can make to stakeholder support and trust...and ultimately its reputation”.

A CEO wants someone at the top table who can help shape their thinking around their business goals, strategic objectives and purpose and who can help influence and optimise the successful reception and implementation of both strategy and transformation (laying the ground and getting the buy-in of stakeholders). 

The corporate affairs director should understand stakeholder sentiment, and what is driving it, and whether historical strategic assumptions are still aligned with this sentiment. They can bring an invaluable perspective to questions such as “where is this going to lead us?” and “do we really understand where we are going with this?” as well as outlining and preparing the CEO for the challenges and pitfalls that lie ahead.

And if they can’t, then they are unlikely to have a position at the top table.

Matthew Kirk, former Group Corporate affairs Director at Vodafone, once described the value of corporate affairs to me, but with public affairs clearly at the forefront of his thinking, as follows,

“Help with alignment of business strategy and the government and public policy objectives of the market/country/jurisdiction…are we going with the flow, or against it and what are likely friction points. The function helps maximise the positive impact of the extent to which our strategy goes with the flow and minimises the negative impact of the point of friction. It makes the function more predictive/anticipatory and provides a stronger basis for CA input into company strategy”..

Catalysing board level debate (which might otherwise not be had)

With its insight, perspective and antennae, the function is able to pose questions, come up with the ‘what ifs’, and apply a 360 degree view that other more insular functions and leaders simply are not able to. Executive committees and senior management teams tend to be packed with executives who have an in-depth knowledge of the operations of the business, along with the data to back it up, but they lack a strategic external perspective (which is why, if the corporate affairs leader is not on the executive, they certainly have to be in attendance).

“Companies need to collaboratively size up the reputation risk associated with corporate decisions – bringing the perspectives of different stakeholder groups helps develop a picture of how they react and interact, and what the true size and nature of the risk is”.

We bring the outside perspective in and apply a stakeholder lens to business decisions, issues and risks”.   

“We ask the questions that others don’t think of, and because of this, other functions and teams run things past us”

This can often mean going against the prevailing winds on the board, which requires considerable courage, intellect, authority and self belief.  Though such corporate affairs leaders exist, and some are getting close, there are not enough of them to change perceptions of the function and to elevate it to a natural board position. “How many corporate affairs directors are influential voices around the C-suite?”, a consulting partner rhetorically asked in a recent conversation.

 

Keeping the CEO connected and on track

CEOs have a lonely job (even more lonely when WFH) and most would admit to appreciating having someone close to them who can give them objective and impartial advice and who they can use as a sounding board. Not only do CEOs have to deal with the complexities of running a company and handling both an executive team and a board, they have to get used to often intense and personal scrutiny and criticism from the media and other stakeholders. It is probably the greatest shock that a newly appointed FTSE CEO experiences.

They need someone to keep them connected to the company’s stakeholders and who helps them understand when and why they need to explain themselves and in what fora; they need someone who can help keep them focused on what matters and what can be dismissed as ‘noise’; they need a highly trusted counsel who can sometimes stop them from making a well-meaning mistake and with whom they can test and rehearse their thinking in private, before publicly articulating it; they need someone who can advise them on whether and how to speak out and engage on a range of social issues that impact one or more of their stakeholders. Black Lives Matter is a classic example of this new’ish trend. So easy to get wrong and get construed as ‘virtue signalling’.

Lastly, they need someone who can help them understand how they are coming across and showing up and what stakeholders are saying about them.

The more maverick and thick-skinned CEOs may not see the need for such an advisor, but most will. It helps them retain clarity, perspective and focus and ultimately to make better decisions.

There is really only functional leader - corporate affairs - that can fulfil all these criteria.

It is the consigliere part of the corporate affairs leader’s role which we highlighted in the “Staying on the front foot report”. It is a relationship that can cause resentment amongst other senior executives, so it has to be exercised discreetly and with good judgement.

Positioning, narrative, communications and advocacy

This is the part of the role that does always get mentioned in the JD. Positioning, narrative, communications and advocacy all play a key role in influencing perceptions, creating connections and engendering favourable shifts in stakeholder support (so long as there is no disconnect with behaviour).

These aspects of the role are not always given the credit they are due, nor is the skill and expertise they require always fully understood or recognised. That may have changed over recent months. Questions such as “what is our position on this?”, “do we need to change our narrative?”, and “how do we best communicate it?” must have been asked repeatedly across UK plc since March, with many people beating a path to the corporate affairs door to seek advice.  

In previous blogs, we have talked about the importance (and power) of language, tone of voice, cadence, tempo and other dimensions of communications and the crafting and the writing. These skills reside in the corporate affairs/comms function, although, as many corporate affairs directors will testify, they are not easy to find.

Corporate Affairs is also best equipped to judge whether the narrative is credible and relevant, how it will land and whether it will get traction with external stakeholders and employees.

In the coming months, many companies are going to want to refresh or review their narratives - their role in society, their purpose, vision, strategy band relevance etc – and do their utmost to remain in control of them. They won’t want to let narrative be shaped or derailed by forces outside their control. They will also want to make sure it is consistently understood and communicated across all parts and touch points of the organisation.  This is difficult to ‘enforce’ across a geographically dispersed company, especially one with fiefdoms, but a strong CA function will play a leading role in providing glue, coherence and cohesion.

Keeping employees connected, engaged and informed

Last, but certainly not least, employees, the domain of the CEO, HR, functional and BU leaders and of course managers, and hence the most difficult of audiences since ‘ownership’ is fragmented and everyone has a strong and often differing view on how to engage and communicate with them.

Irrespective, since the internal communications team tends to report to corporate affairs or corporate communications (certainly in the FTSE, where it is rarely into HR), then it is undeniably a corporate affairs responsibility. With so many employees working remotely - we have covered this in a number of previous blogs - communications (language, tone, messaging) is the primary means of maintaining a sense of connection to a company, and the local team, and it will be critical in coming months, as tougher times lie ahead. 

Conclusion

Listening station, radar scanner, intelligence unit, transformation and strategy enabler, consigliere...these are the parts of the corporate affairs leader’s role that don’t often appear in the job description. Of course if they were included and expected, it would raise the bar in terms of candidate calibre, but such candidates exist.

If an organisation builds bridges and stronger connections with its stakeholders, if it makes a favourable impression on its stakeholders, if the ExCo is helped to make the right decisions/ better decisions, if it engenders stakeholder support and harnesses the power of third party endorsement,  if it receives the benefit of the doubt in times of trouble, then it stands to reason that it is going to be in a stronger place.

This is not a JD for any other function in a company, other than corporate affairs, and what company of any sizeable scale and profile does not need such a function? In these current circumstances, where recovery rather than growth is the goal for most, corporate affairs, with the right leadership and capability, can help move a company to a stronger and more trusted position.  

#covid19 #CoronaVirus #InternalCommunications #CorporateCommunications #corporateaffairs #watsonhelsby #nickhelsby

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