It’s been a year like no other. The last nine months have seen us live through more disruption than we might have expected in nine years. This has brought into sharp relief the importance of the corporate affairs function to businesses. Whether it’s been empathetic dialogue with colleagues and customers, open engagement with capital markets, sharp operational communications to help keep the business going or building stronger relations with local communities and wider stakeholders, every in-house corporate affairs team has delivered time and again in 2020.
Grab the moment
Now, as Christmas approaches, and with teams no doubt running on empty, the opportunity to rest and pause is inevitably appealing. But, before you and other Corporate Affairs Directors grab that much-deserved mince pie, now is an important time to gauge the function’s readiness for the challenges ahead. We are picking up signs from senior business figures that Boards and executive teams will enter 2021 with renewed determination to plot a successful growth path out of the pandemic and Brexit. The need for an effective corporate affairs function to help sustain and accelerate these growth plans will be crucial test of your team’s collective mettle.
Your team may have helped the business keep pace with events in last nine months, but is it ready to help deliver on the new path which is coming? How can you capitalise on the “good battle” you fought in 2020 and refocus the function on the challenges your business will be facing in 2021?
Be one step ahead
If the core role of the function is to be one step ahead of the business, then knowing which paths the business will be considering in 2021 is absolutely fundamental.
All indicators are that every Board and executive team, in developing its plans, will be seeking to harness at least one of three financial forces that are currently at play.
First, it could be at a capital level, through M&A (whether acquiring or defending) or new access to debt and equity markets. For this, the acid test of the corporate affairs function will be the strength of alignment with investor relations and a narrative and supporting tactics rooted in the value creation story.
Second, the focus could be on accelerating a change in the business model. Here, the role of employee and supply-chain engagement will be key.
Or, third, the attention could be on accelerated organic growth – whether that be through market share or revenue/margin enhancement. Here, campaigning capabilities and strength in public affairs will be key in ensuring increased regulatory or tax burdens do not disadvantage the commercial strategy.
More importantly and most likely, the executive team will be pursuing a combination of all three routes. And that is when the corporate affairs function, working closely with colleagues in investor relations, will need to come into its own to establish a unifying communications strategy that successfully shapes internal and external perceptions. At its core, that singular approach will also need to take account of the increased activism that exists across all audiences – whether that be vocal employees, demanding campaign groups or shareholders who are either activists in the traditional form or more like a stakeholder activist with a focus on ESG.
Know your internal allies and make the most of your own strengths
Developing that successful unifying communications strategy will be rooted in knowing which internal alliances will be most critical to you and which capabilities and competences are best required internally or need to be insourced for 2021.
In terms of internal alignment, we have found that a corporate affairs function which has strong links with the insight, risk, investor relations and sustainability functions has a greater chance of demonstrating its effectiveness. Similarly, in terms of competencies and capabilities of the team, mastery in interpreting data and developing digital-first plans are key, but so is really good writing if narratives are to be truly compelling.
The demands on the corporate affairs function in 2021 will be different and potentially even more challenging than the last nine months with the function again needing to be both strategic and agile. And these demands come on top of your own personal role as functional leader and a trusted advisor to the CEO. You therefore need a team behind you that is firing on all cylinders and focused on supporting the business strategy. You and your team delivered incredible results in 2020 as you helped to protect the value of the business. But do you have the tools and capabilities required to deliver on the value creation challenge in 2021?