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WHY STRATEGIC
PUBLIC AFFAIRS MATTERS

The days of private and publicly-traded companies “flying under the public radar” on issues outside of core business are unequivocally behind us.  Beyond identifying and mitigating corporate risks, clear trends have emerged concerning the role of business in the realm of societal leadership, and the ascension of executive leaders as critical stakeholders in building and maintaining public trust.

EDELMAN TRUST BAROMETER 2022 - HIGHLIGHTS AND KEY TRENDS

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In 2001, Edelman introduced their “Trust Barometer” study, which has provided valuable insights into the relationships “that all institutions – business, governments, non-governmental organizations (NGO’s) and media – build with their stakeholders.”

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There are 10 major conclusions summarized in the 2022 Edelman Trust Barometer, however for the purposes of highlighting priority implications for corporate public affairs strategies, five are highlighted here:

 

  1. Of the studied institutions, business is once again the most trusted.  At 61%, business is the most trusted, ahead of NGO’s at 59%, government at 52% and media at only 50%.
     

  2. Business needs to step up on societal issues.  While business outscores government by 53 points on competency and 26 points on ethics, respondents believe business is not doing enough to address societal problems, including climate change (52%), economic inequality (49%), workforce re-skilling (46%) and trustworthy information (42%).
     

  3. There is a collapse of trust in democracies.  In many of the democracies studied, institutions are trusted by less than half of their people.  Moreover, no developed countries believe their families and self will be better off in 5 years time.
     

  4. Societal leadership is now a core function of business.  When considering a job, 60% of employees want their CEO to speak out on controversial issues they care about and 80% of the general population want CEOs to be personally visible when discussing public policy with external stakeholders or work their company has done to benefit society.  In particular, CEOs are expected to shape conversation on jobs and the economy (76%), wage inequity (73%), technology and automation (74%) and global warming and climate change (68%).
     

  5. Business must lead in breaking cycle of distrust.  Across every single issue, by a huge margin, people want more business engagement, not less.  For example, on climate change, 52% say business is not doing enough, while only 9% say it is overstepping.  The role and expectation for business has never been clearer, and business must recognize that its societal role is here to stay.

 

Implications

 

  • Businesses can longer afford to view traditional stakeholders with direct impact on their business without also considering broader societal, economic, and cultural dynamics across an incredibly wide stakeholder spectrum.

 

  • Endeavouring to develop and implement comprehensive corporate public affairs strategies involves aligning with both corporate growth strategies and public engagement and positioning strategies.  As important, this converged strategy needs to be executed across a number of issues previously viewed as exogenous, or “outside of the core business,” by executive leaders.

 

  • Public sentiment supporting more engagement by corporate leadership on social issues is a definitive trend, and should be viewed as an opportunity, not a liability.  Waning public trust in governments and media provide a natural space for corporate leaders to fill the void, influence public discourse, and encourage solutions-based dialogue.

 

Convergent Strategies is uniquely situated to help organizations across a number of sectors plan, develop, and execute against these complex strategic considerations.

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