Corporate Affairs: The Profit Shield

In the 1990’s, TV, newspapers and radio dominated the media landscape. Scripted TV appearances and a few well-timed lunches with journalists would ensure the narrative for these localized crises was tight and quickly contained. The last 40 years has seen a media explosion with multiple channels informing a global audience at the speed of light. User-generated content gives consumers a powerful voice, while influencers have the power to sway an electorate.  

Stakeholders have also become more complex. Employees now serve as important advocates, while activists expect companies to take stands on social, political and environmental issues. Government bodies have increased regulation, requiring more insight to business operations. Additionally, a plethora of high-profile summits such as COP, the G7 and G20, and the World Economic Forum in Davos, present opportunities for businesses to engage in advocacy and alignment.

Corporate Affairs Directors are responsible for juggling the range of stakeholder interests, channels and content. Teams of professionals have expanded significantly to include social media, sustainability, storytelling, and data analytics alongside traditional media relations and government affairs. In the UK, teams in the FTSE 50, often exceed 500, in some cases 1,000 professionals. Listed companies see clearly the value of reputation on share price, with corporate affairs protecting profit or loss. 

Corporate brand has value above and beyond the products or services it represents. Businesses are expected to have values and viewpoints and are held to account should they fall short of expectations - such as misconduct or misjudging consumer sentiment - which can have a catastrophic impact on the bottom line. 

The classic argument for investing in your reputation is that you need to put equity in the bank in case of crisis. A recent Ipsos report defines this argument as the “future value” of reputation. Reputation also has a very real “present value”.

Those who trust your brand are more likely to see and read your content, buy your products, or use your services. Recruiting the best talent requires investing in reputation, and according to the 2024 global reputation tracker report, employees are more productive when they work for a company that has a good reputation. Indeed, the factor with the highest year-on-year increase in influencing business reputation is the quality of the workplace. 

Reputation crisis prevails where operational decisions are made without proper consideration of stakeholders, perspectives and communication. Corporate affairs directors should be encouraged to hold uncomfortable mirrors around an executive committee table, rather than inheriting crises to clear up. They need to be in the room whilst decisions are being made. Over 50% of FTSE 100 companies have Corporate Affairs Directors as established members of the executive committee, recognizing their role in protecting and enhancing business profit. 

Corporate affairs is often seen as necessary in times of crisis. A recent ‘Leadership in a Crisis’ report by FGS Global reported more than 85% of businesses experiencing a crisis, with the consensus being that crises are becoming more prevalent and unpredictable. 

The Edelman 2024 Trust Barometer revealed that rapid innovation offers a new era of prosperity. It also exacerbates trust, leading to further societal instability and political polarisation. This melting pot of discomfort is where corporate affairs thrives: finding connecting themes between business and stakeholders, ensuring operations align with consumer and government expectations, and providing stability for employees and shareholders.

Corporate Affairs is an essential member of an executive committee team. When resourced strategically, Corporate Affairs Directors can help to can unlock, as well as defend, profit. Given the parallel between reputation and revenue, the fragmentation of media, era of digital natives and increasing global volatility, we will see the demand for Corporate Affairs Directors continue to increase.

Odgers Berndtson’s expertise and global network are uniquely positioned to assist organizations in managing their corporate affairs effectively. By leveraging our extensive track record and worldwide presence, we help companies navigate complex reputational challenges and seize opportunities with innovative best practices.

Our insights and strategies ensure that organizations secure top-tier professionals in corporate affairs, fostering a culture of transparency, accountability, and trust that is essential for long-term success.

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