As every corporate affairs practitioner will tell you, some CEOs “get” corporate affairs better than others. There have always been some who do, and some who don’t.
The good news for practitioners is that the proportion of business leaders who understand the role of the function and the value it can deliver is steadily increasing. At Anna Whitlam People, we are seeing an increased sophistication among our clients in their approach.
They don’t just want people who can manage a media crisis when it comes along, they want people who can manage reputation and reputation risk in a way that creates value for the organisation. Helping them avoid the media crisis is part of that value, but only part.
They don’t just want people who can organise a meeting with a government minister. They want someone who can develop a strategy based on interaction with government to remove barriers to them doing business, or simplify regulatory controls.
Of course some companies, and some CEOs, are further along the learning curve on this. We still know some CEOs – and perhaps more often CFOs – who see the corporate affairs team as a cost centre that adds peripheral value only.
These are executives who still think strategy is best developed without corporate affairs involvement – they make the decisions and then tell the communications team to get on with selling those decisions to the relevant stakeholder.
Those kind of business leaders already look like dinosaurs, and our view is that those particular dinosaurs will become extinct. It is a great opportunity for people working in corporate affairs – but they too will need to adapt.
This is an issue our research partner, the Blue Rubicon Institute, has been exploring.
Blue Rubicon’s Basil Towers says the corporate affairs function will take the lead in the management of reputation and reputation risk. It is a view based on his interviews with more than 1,000 board members, senior executives and corporate affairs leaders in Europe, the US, Asia and the Middle East
He says many leaders see corporate affairs becoming responsible for ensuring that an understanding of reputation risk is embedded across the business, and that such an understanding influences strategies, operations and processes – it won’t just be a ‘nice-to-have’ add-on.
The function will work with Boards and CEOs to identify the company’s risk tolerances on reputation and to ensure those tolerances are aligned to the business purpose and strategy.
Corporate affairs leaders will work with risk management to ensure reputation risks are fully integrated into formal risk management policies and structures.
In Basil’s view, it will be the communicators – rather than risk managers – who are responsible for arguing the business case for reputation risk management across the business.
The communicators will identify crucial stakeholder groups, monitor the management of reputation risk and intervene where necessary. They will identify new reputation risks as they emerge and develop strategies to manage them.
So what does this say about the kind of people CEOs will be looking for to run communications functions?
We believe they will increasingly want people with commerce degrees and MBAs rather than communications degrees.
They will want people with analytical skills, emotional intelligence and cultural awareness. The ability to influence senior leaders and put themselves in the shoes of stakeholders, clients, and customers.
The best, most successful corporate affairs practitioner already have all those skills. But those who don’t, will go the way of the dinosaur.