The Business End of Public Policy

The faintest whiff of cronyism between executives and politicians will be swiftly seized upon as the public and media continue to bay for corporate blood. In one sense, that’s only right and proper, but the reality is that business and policymakers have to work together in order to achieve the right outcomes.

From the point of view of a business, it’s vital the CEO takes the lead on issues and is confident that affairs are conducted transparently and information is being shared. Richard Laing, Non-executive Director at the London Metal Exchange and a Criticaleye Associate, says: “In today’s integrated world, a business can’t survive if it puts its head in the sand and just pretends it’s operating in its own sector. Businesses are permanently being influenced, whether they like it or not; from the VAT they’re paying to their licence to operate.

“If you’re going to have a good relationship with government it’s really important to be having a dialogue because, in the absence of that, they will get their information from other sources, and they’ll probably get it wrong.”

Sir Michael Lyons, Chairman of regeneration company The English Cities Fund, says: “The first thing CEOs must recognise is that regulation is a fact of life and that it is better if it is designed by people who understand your business environment…  It is straightforward self-interest to engage with policymakers so that they can understand the dynamics of your business.”

The intelligence available to corporates operating internationally can far exceed the knowledge of domestically-focused governments. Susan Pointer, EMEA Public Policy & Government Relations Director at Google, says: “It’s about sharing access to information and the research that we are lucky enough to have access to.

“It is incredibly valuable to compare what’s happening in the international environment, whether it’s EU legislation or with international organisations. That’s increasingly powerful and necessary, given the globalised nature of both companies and policymaking. Businesses can help provide that [global perspective] in a very neutral way, and that in itself has value.”

Ian Wright, Corporate Relations Director at Diageo, says: “There’s an increasing opportunity to engage politicians not just when you have something you want, but to actually engage them in the continuing story of your business. I’m particularly enthused at the way we are able to interact with UKTI – UK Trade and Investment – who are, I think, really batting for British industry.”

Standing tall

The absolute key is ‘how’ the relationship is conducted. Nick Helsby, Managing Director of executive recruiter Watson Helsby, says: “Interaction with government has got to be a lot more transparent, businesslike, sophisticated and meaningful than in the past. Politicians need data and evidence to make their decisions, and all meetings need to be recorded; they are much more conscious of the fact that they cannot be seen to be in hock to business in any way.”

This is where CEOs can help to set the tone. Sir John Egan, a  Criticaleye Associate and former Chairman of SevernTrent Plc during a period of heavy restructuring for the business, agrees: “The public image of a company is one of the things that the CEO has to take a great deal of interest in… [If you don’t], I think you’re not taking your job seriously.”

Ian says: “CEOs have to be familiar with the workings of government. They don’t have to be an expert, but they have to at least understand how government works, how decisions are taken and who the key players are. I don’t necessarily mean individuals, but what the main drivers are of public policy. And they have to have a very close familiarity with the public-policy implications of the actions of the business.”

Engaging with policymakers as a CEO should, in many instances, be a low key affair. Richard Ackroyd, CEO Scottish Water, explains: “It’s vital if you’re in a public service organisation, whether it’s publicly or privately owned, to maintain strong relationships with the government and other key stakeholders like regulators… that’s the role of a CEO.  But that’s not necessarily high profile… There is a danger that you become the story, rather than the business.”

Jane Furniss, CEO at the Independent Police Complaints Commission, says: “It’s critical… if you want to participate and influence. Otherwise you risk wasting your time, energy, money and perhaps more importantly creating a bad impression – and with it becoming people to resist and avoid rather than people to listen to.”

It is a case of a targeted, measured approach which takes into account the vast differences between the private sector and public bodies. Jane continues: “Business people often don’t know where to start when seeking to influence policy. The solution is rarely extensive lobbying or writing to the Prime Minister… The key is to understand where and who the people you ought to be talking to are and then find out from them how you can help their agenda, before you set off to do a load of work that then ends up going nowhere.”

Provided these conversations are carried out in the right spirit and lines are not crossed, the result should be better and more informed decisions. Susan says: “There is a value in being perhaps more transparent even than your government contacts would like. It’s that transparency which ultimately helps to create trust and credibility over the long-term.”

Please get in touch if you have any comments about the issues raised here.

I hope to see you soon.

Matthew

www.twitter.com/criticaleyeuk

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