Corporate lobbyists know intuitively that they add value to a company. Now they have proof. According to a recent study by four financial scholars, companies that lobby significantly outperform those that don’t. In fact, say the authors, “lobbying is an important channel through which the firm can strengthen operational results and competitiveness.”
But lobbying is only part of a company’s overall public affairs strategy. Because public affairs seeks to manage all aspects of a firm’s business environment, companies are learning to integrate their government relations, communications and corporate citizenship activities in ways that add even more value.
In a new survey from the Foundation for Public Affairs, 79 percent of business executives say public affairs already plays an increasingly important or very important strategic role in their firms. An additional 14 percent say it is becoming more important. (The Foundation is the research affiliate of the Public Affairs Council.)
Given these data — and the political and economic uncertainty facing the world — it’s no surprise that corporations are increasing the resources devoted to public affairs.
Corporate public affairs departments survived the budget cutbacks of the 2008-2011 timeframe better than did many corporate functions. Forty-four percent of respondents to the Foundation for Public Affairs survey say their budgets have increased over the past three years, while 36 percent say their budgets have remained the same.
Staffing levels also have been remarkably resilient during this time of corporate retrenching. The median number of professional staff in the survey sample is seven (though the headcounts ranged from one to 350 people). Nearly one-half (46 percent) report increases in professional staffing, while 35 percent say the professional staff headcount remained the same. Meanwhile, the administrative staff headcount increased in 23 percent of companies, with 64 percent reporting no change.
In order to be effective, public affairs executives need access to the top levels of the company — and most have it. In the Foundation for Public Affairs survey, nearly one-half say they report directly to the CEO, chairman or president, and another 30 percent report to the company’s general counsel. The rest report to an officer or a business unit head.
Because of this access, public affairs executives have been able to persuade CEOs to become increasingly involved in corporate public affairs activities, from communicating with Congress to endorsing corporate political programs. While CEOs had decreased their involvement in direct federal lobbying in 2008 (when this survey was last conducted), nearly three in four have recently engaged in federal lobbying. Roughly the same number made contributions to the company’s PAC.
What CEOs aren’t doing is spending as much time at trade association meetings. Direct involvement in associations has been on the decline since 2005, when 89 percent of companies said their CEO was active in associations. This year, only 68 percent report their CEO is active.
But this doesn’t mean firms are abandoning trade groups. To the contrary, 38 percent have relied more on trade associations over the past three years, and only 14 percent have relied less on associations. Back in 2008, we noted that companies had greatly reduced their reliance on business associations (such as the U.S. Chamber or the Business Roundtable) for lobbying and issue advocacy. Since that time, the percentage of firms using business groups for these functions has risen — particularly for issue advocacy.
In addition, more than half of respondents say they have increased their use of coalitions over the past year; only 4 percent report a decrease.
Running a public affairs department is not without significant problems, however. When asked to name their greatest challenges, a growing number of executives (63 percent) list the difficult political environment, and 57 percent list insufficient staff resources. The third highest vote-getter (40 percent) is the difficult economic environment — a reason not even mentioned when the survey was conducted in 2008.
Given the amount of publicity generated by changes to the lobbying/ethics laws in recent years, it’s worth noting that only 9 percent consider the complexity of these rules to be a challenge. When asked to comment on emerging issues, only 21 percent point to possible changes to these laws as a major worry.
Despite the assumption (propagated by the media and reform groups) that companies spend a lot of time trying to work around gift bans and registration rules, their focus is on larger issues. Like most Americans, public affairs executives are frustrated with partisan politics, nervous about the economy and wish they had more resources to do their best.
If you’re looking for convincing evidence that public affairs has become a mainstream corporate function, you just found it.
Comments? Email me.
Copies of the 2011-2012 State of Corporate Public Affairs report are available free of charge to survey participants. Additional copies are available for $100 each. Non-participants may also purchase the report for the same price. For a list of participating companies, click here. For questions about publications, contact Patrick Corcoran at pcorcoran@pac.org or 202.721.0917.
