As an Executive Search and Board Development consultancy with deep expertise in senior stakeholder roles, Fidelio recently hosted a breakfast for Corporate Affairs Directors. The original subject ‘A Seat at the Table for the Communications Director?’ has now become acutely relevant given the turmoil resulting from the recent Brexit vote.
We were delighted to welcome Matthew Kirk, Global External Affairs Director for Vodafone, to speak at the Fidelio breakfast. Matthew has been with Vodafone, one of the UK’s largest telecommunications companies, since 2006 and has sat on the Executive Committee since 2009. Prior to this he served over 20 years with the British Diplomatic Service, including senior positions in the Foreign and Commonwealth Office.
The topics for discussion were:
- Does the Corporate Affairs / Communications Director need a Seat at the Executive Committee Table to be effective?
- Do we require stronger Stakeholder Engagement / Communication skills in the Board room?
Inevitably how Corporate Affairs Directors are responding to Brexit was also a major theme. At the breakfast we were joined by Communications and Corporate Affairs Directors from leading companies, both UK and international, across a range of sectors. The key themes are summarised below:
- The Growing Corporate Affairs Remit/ A Seat on Executive Committee
Matthew kicked off by explaining that he does indeed have a seat at the Executive Table but also making clear that his External Affairs remit extends beyond the Communications role. The rationale for the Executive Committee Seat has to be the contribution to strategy rather than a more traditional reactive role. There are two clear contributions: External Affairs informs the company leadership of the external environment, and strategically shapes a platform and framework in which the company can operate, with a particular view to regulatory and reputational issues. Matthew defined this as the responsibility ‘to make things not happen.’
Matthew’s remit extends through Communications to Government and Public Affairs, reputation and sustainable business, security and Vodafone’s charitable Foundations, as well as contributing to the broader definition of company strategy – his seat on the Executive Committee is a reflection of this.
Indeed Fidelio had identified this trend for the Corporate Affairs function to extend beyond Communications as early as 2013 – see From Communications Director to Chief Trust Officer – it’s all about Corporate Reputation. Particularly in multinational companies in heavily regulated industries, the role of the Corporate Affairs Director and the structure of the Corporate Affairs function is becoming increasingly multi-faceted and complex. Recent events in the UK underscore how important the capability to engage with very diverse key stakeholders has become for companies large and small.
- Crises and Internal Communications
Prior to the UK Referendum a debate raged around whether and what employers should communicate to their employees; since the unexpected Referendum result the importance of employee communication has only increased. The Corporate Affairs and Internal Communications Directors at our breakfast recounted how, following the Referendum result anxious employees had sought guidance on issues of visas, residency and ultimately job security. On many of these questions employers have no answers but are also acutely aware that companies are being looked to as a source of authority and reassurance, particularly in the absence of political leadership or guidance. The importance of Internal Communications/ Employee Engagement will only increase given the uncertainty ahead.
- Failure of Business to Connect
Our guests agreed that the Referendum result exhibits the extent to which the public perception of major corporates remains dangerously low. First damaged by the Financial Crisis, trust remains weak and arguably business suffers a crisis of legitimacy.
Our attendees discussed the ways in which the benefits of business could be made more tangible. In some areas, for example the importance of dividends from the FTSE 100 for UK pensions, the invisible benefits are poorly understood. Matthew described some of the work undertaken by Vodafone with customers and employees to make this connection visible. A number of leading companies represented at the Fidelio breakfast articulated the trend to associate social benefit with the brand rather than the corporate. This is done in a number of ways, often at a local level, and there is evidence that this connection is more readily understood and tangible.
We were delighted to be joined by the Communications Director of the Business Growth Fund as well as a Communications Director from a fast growing global technology company. Both reported on a very different public perception of smaller companies and fast-growing technology firms. Entrepreneurship is held in much higher regard than big business and many small companies also benefit from strong roots in the local community.
- #Business4Stability
There was consensus that business must respect the democratic process. There was also understandable concern about the political vacuum and the Corporate Affairs Directors around the table agreed that business has a role to do what it can to ensure stability.
One important role is calm communication and not inflaming speculation on issues such as Head Office (re)location and job security. Sometimes not communicating is the judicious response.
A second critical role for leading corporates is recognising how stretched government will be in preparing for Brexit negotiations and providing support. Given the sector expertise that resides within major companies on trade and regulatory issues, there is a recognition that business can make a major contribution by clearly prioritising the factors essential for success. It was clear that business must take an active but sensitive role in helping to shape the post-Brexit business landscape.
- Corporates shore up the Communications/ Public Affairs function
A number of companies around table indicated that in the run up to the Referendum the Communications and in particular the Public Affairs functions had been reinforced. This was expected to continue given post-Referendum uncertainty. Corporates need to ensure that they have their finger on the pulse in London, Brussels and Berlin. They also need greater certainty that important messages will land with the audiences that matter; in the run up to the Referendum it was clear that business, in particular major companies, struggled to communicate with possibly the most important stakeholder of public opinion. It was recognised that Boards are naturally more comfortable appealing to the head than the heart, while the Referendum was fought with high emotion. It is expected that the demand for talented Corporate Affairs and above all Public Affairs expertise will increase, driven by the Referendum outcome.
Fidelio Conclusion
Fidelio’s breakfast guests did not underestimate the enormous challenges facing the country and business. Those familiar with Switzerland and its relationship with the EU suggested the UK has a tough road ahead if it wishes to retain full access to the single EU market without freedom of movement.
But equally Corporate Affairs Directors of leading companies recognise the responsibility business holds for not accentuating volatility and also supporting the government to achieve the best possible outcome. Matthew clearly articulated how his team is responding to the challenge through clear focus on the key regulatory issues, interpretation of unfolding events and calm communication with employees and stakeholders.
Appreciation of the value of good Communications and Stakeholder Engagement is cyclical and corresponds to crisis. The current turmoil will test the mettle of Corporate Affairs professionals but also reinforce the difference that effective Stakeholder Engagement can make.
As a Board Development and Executive Search consultancy Fidelio has a deep appreciation of the contribution that Corporate Affairs Director make in the Brexit fog. For further information on how we can support your company in strengthening its Corporate Affairs functions through Search or Development, or of Fidelio’s Seat at the Table Programme for senior female executives please contact Mark Cumberlege, or alternatively call + 44 (0) 20 7759 2200.