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Public Affairs Insights from the Centre

20 Jan 2020

The Centre’s Top Five Predictions for the Corporate Public Affairs function – 2020

Wayne Burns

Welcome to the Roaring 20s of the 21st Century, and to the Centre’s Top Five Predictions for the coming year.

Looking back on our top prediction for 2019 – that more companies would become involved in advocacy around social and political issues – we have some confidence that our socio-political and business management crystal ball can provide some guidance for you and your team in 2020.

Our Top Five 2020 predictions are based on our work with corporations and governments in Australia and across Asia Pacific; our discussions with Boards, CEOs and their senior management teams, and heads of corporate public affairs functions; as well as insights gleaned from our consulting work globally.

1.    A shift from ‘cooperation’ between the corporate public affairs and marketing management functions to far more ‘collaboration’
Organisations such as Lend Lease globally, and many professional service firms and professional associations, manage corporate affairs and marketing in the same management function, with the head of corporate affairs also heading the marketing management function.

The Centre is not forecasting a shift to this type of arrangement becoming a trend.  However, we predict relations between the management functions of corporate public affairs and marketing – in many organisations akin to the love between Russia and Ukraine – will see these parts of the business working more closely on:

-    stakeholder research (marketing ‘owning’ the customer, corporate public affairs focused on enabling environment stakeholders); 

-    brand and reputation (corporate public affairs responsible for the corporate/stakeholder brand, as well as corporate reputation strategy and measurement, and marketing responsible for retail/customer brand and brand identity); and

-    some social media content (corporate public affairs utilising the marketing function’s social media production smarts to populate online stakeholder engagement content).

In 2015 we predicted more corporate public affairs functions would be looking for areas where they could cooperate with their marketing departments more closely.

Since then, many corporations in Asia Pacific and globally have developed closer working relationships between social media production and scheduling professionals in corporate public affairs and marketing, to better coordinate campaigns, content, and to better manage issues and reputation stewardship.

In 2020 we predict that while cadence will continue to be a joint outcome of closer cooperation between corporate public affairs and marketing functions, step changes in how reputation and issues management strategy can be aligned to more adroitly influence all stakeholders – corporate/enabling stakeholders as well as customers – will be the sharp focus of collaboration (working jointly to generate outcomes).

2.    More Boards will approach and monitor corporate reputation as a material risk

About 20 per cent of ASX and Fortune 100 companies operating in Australia approach and manage corporate reputation as a material risk, monitored by a Board-level committee, and measured and reported to the Board by the corporate public affairs management function.

We predict that the fall-out across 2019 from the Hayne Royal Commission into banks and financial services, as well as regulatory and parliamentary scrutiny of financial services, will in 2020 see far more entities listed publicly in Australia, and international entities doing business in Australia, approaching corporate reputation as a material risk.

There are very few corporations that would not state that reputation was ‘vital’ or ‘very important’. Boards get especially serious about corporate reputation after an uncomfortable, share value destroying stroll through the reputation valley of death.

The reputation battering to which the Big Four banks and AMP were subjected in 2019, along with large entities with reputation issues hectoring companies including Facebook, Google, Harvey Norman, and BUPA, means that in 2020 many more boards of governance will be attuned acutely to how valuable and vulnerable reputation is: and will be exercising more oversight of corporate reputation strategy, its execution, measurement, and reporting.

3.    Corporate responsibility to the fore
With community trust in institutions under pressure in most parts of the world, including Australia and New Zealand, the stewards of those institutions are looking to what behaviours and other actions they can pursue to secure and extend social licence to operate.

For corporations, as well as fulfilling their promise to deliver the goods or services they promise to customers, and to sustain returns to shareholders (or taxpayers if the entity is a government department or agency), we forecast that in 2020 and for some years beyond, there will be higher community expectations of the collective corporate responsibility of industries and sectors, and of individual corporations.

About a quarter of a century after the start of the ‘corporate responsibility wars’ over if corporations had obligations to shareholders as a broader sweep of stakeholders other than shareholders alone, but responsibility also to employees, communities in which entities operate, the environment, and supply chain partners, the notion that companies should manage themselves in a corporately responsible manner is contested by a shrinking number of businesspeople and investors.

Despite a 2019 push by some business leaders to pressure the ASX to water down its corporate responsibility guidelines for listed companies (which succeeded), we forecast that community expectations around the corporate responsibility of large companies will be in sharper focus in 2020; and especially their efforts to mitigate their environmental impact.

Whatever one’s view of what did and did not contribute to the bushfire catastrophe across Australia between August 2019 and January 2020, community concern about the contribution of climate change to the intensity and frequency of natural events such as bushfires, cyclones, storms, and floods seems to be approaching a tipping point in 2020.

Many companies and industries have been working towards low or neutral carbon emissions, and reporting progress for some time.

Expect more scrutiny from the news media, State Governments in Australia, not-for-profit civil society groups, and large pension and superannuation investment funds, of company and industry targets emissions and broader environmental impact targets, and of performance against them.

4.    The emergence of the campaign manager role
Last year the Centre predicted that public advocacy campaigns by corporations and coalitions including corporations would ‘be back’.

We predict that 2020 will see the role of ‘manager, campaigns’ established in many larger corporate public affairs teams to develop and manage internal and external campaign advocacy and information strategies to support the organisation achieve its objectives.

Campaign managers in corporate public affairs teams will also corral resources and smarts across disciplines in the corporate public affairs team, and from other management functions in the organisation.

Smaller teams would (and are beginning to) in-resource campaign expertise via consultants and specialist public campaigning shops.

The warm bodies to fill the specialist campaign manager role will come from within the ranks of existing corporate public affairs practitioners, or from specialist campaign professionals working in politics, industry associations, or non-government advocacy organisations who will be recruited into the role.

5.    More 2ICs
In most corporate public affairs management functions the role of the 2IC – deputy head of function – does not exist formally; although in many teams there are ‘informal’ 2ICs who have considerable informal authority granted to them by team members and the head of function.

Our work and discussions with heads of function and other leaders in organisations suggest strongly that a formal deputy head of function role will be established in many larger corporate public affairs teams.

We forecast that the formal deputy head role could be accountable for considerable ‘machinery’ responsibilities involved in managing the function, similar to the manner that the chief operating officer works with the CEO in many entities.

Such a role would most likely be responsible for important functional accountabilities including measurement and reporting, involvement with some industry and stakeholder groups, supporting the head of function lead engagement with other management functions around issues management, crisis management, internal and external campaign strategy, and leading corporate public affairs contributions to significant internal change projects.

The year ahead
We’ll report on these developments during the year ahead via our executive education modules, podcast, Newsletter, eNewsletters, blog, and via Twitter and LinkedIn.

Our best wishes for the New Year, and the coming Chinese Lunar New Year of the Rat (it has been said that the worst thing about the rat race is that a rat always wins).

The Way We Were – Centre Top Five Predictions in years past

The year that was: Centre Top Predictions for 2019
1. More companies will get involved with and engage with social issues.
2. The Investor Relations discipline will begin migrating back to the corporate public affairs management function.
3. Heads of Function will seek more diversity of thought in their teams.
4. Arms Race for advocates.
5. Campaigns and coalitions are back.

The year that was: Centre Top Predictions for 2018
1. More psychographic profiling using Big Data.
2. Boards want more frequent reputation research.
3. More demand for generalist practitioners.
4. Many public affairs teams will get bigger.
5. Corporate brand management will be back in the function.

The year that was: Centre Top Predictions for 2017
1. The evidence-base Arms Race.
2. The beginning of the end of the corporate Intranet.
3. The digital production-savvy corporate public affairs practitioner.
4. Infographic mania.
5. More women leading the management function.

The year that was: Centre Top Predictions for 2016
1. Stakeholders at the heart of corporate public affairs strategy.
2. Social Media Command Centres.
3. Public affairs night shifts will be introduced in some organisations to monitor issues, and provide rapid socio-political response.
4. Renaissance of the corporate narrative.
5. Public Affairs helping their organisation understand the Asian Century.

The year that was: Centre Top Predictions for 2015
1. Convergence of internal and external communications.
2. More cooperation between public affairs and marketing departments.
3. Application of heuristics to corporate stakeholder communications.
4. Stakeholder research becoming an essential input to public affairs strategy and planning.
5. Advent of a 'common market' for corporate public affairs skills across Australia and Asia.

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The Centre for Corporate Public Affairs is the only entity of its type internationally, connecting, via corporate membership, the corporate public affairs and communication function across Australia, New Zealand and Asia. We assist our members embrace best practice public affairs structure and strategies.

Our research, professional development programs, events and international thought leadership opens doors to help organisations and practitioners build and apply corporate public affairs as a core management tool and function.

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