STRENGTHENING IN-HOUSE GOVERNMENT RELATIONS

Major businesses cannot afford to be without organized and effective government relations operations. Elected officials and regulators increasingly are introducing more aggressive and more wide-ranging measures that significantly impact business interests. Government relations also can help a business advance its own interests and improve profitability.

Corporations vary tremendously in the support they provide for government relations departments, largely depending on the nature of the industry, size of the company, public policy questions involved, and leadership’s attitude towards the political process. Major businesses generally have at least one division or office with externally oriented tasks that direct or supervise governmental lobbying, grassroots lobbying, coalition building, public relations and political activity to ensure positive relationships with local, national and EU authorities. A key internal consideration is whether a corporation’s government relations staff will report to general counsel within the company’s legal department or fall under a communications or public affairs division. The former approach is advisable when a business is consistently confronting complex legislative or regulatory proposals, and it helps to guard against conflicts of interest if there are different outside professionals involved.

The key advantage of an in-house government relations apparatus is the company’s direct capability to create and maintain its own organizational identity and visibility. This entails a responsibility to develop its own relationships with officeholders and establish an organizational presence in key national governments and parliaments and at Brussels level. Companies with substantial interests in a number of Member States also have to decide how to cover them, with an emphasis on jurisdictions where they have a substantial physical presence and where markets are significant.

Organizations sometimes fail to build relationships with the local elected officials until they need assistance from those officials. A corporation should act affirmatively, take advantage of its location, and embrace a role as a business ambassador to elected officials at all levels. This connection can take the form of initial outreach by the CEO or a senior official and needs to be followed up with contact by an in-house staff member who will work directly with and be responsive to the elected official and his or her staff. A company should aim to be one of the first calls that an elected official makes on an issue of importance to that company’s industry. It is much easier to approach an elected official with whom one has an existing relationship when a problem arises.

Although company executives tend to connect with higher-ranking elected officials, it is also important to maintain a strong relationship with local officials where their corporations operate. Elected officials are ambitious, and failure to establish and maintain these local relationships can be a missed opportunity both in the present and the future.

An important early exercise will be identification of the business’s interests that currently are at stake. Are there issues that should be initiated by the company? Which issues should be monitored? What relationships are needed by the company that it does not yet possess? What is the regulatory and political climate at the Brussels level and in key Member States?

The reality is that few companies have the luxury of “playing offense” – that is, being proactive with government relations. Rather, companies are generally concerned with monitoring the political environment, identifying potential threats and designing suitable defenses. Two initial questions will be, “What existing legislation or proposed regulations will hurt us?” and “How do we get into the act early enough to have an impact?” There should be collaborative discussions of these preliminary considerations that should include business leadership, in-house government relations staff, contract lobbyists and, wherever appropriate, staff of the various trade associations.

Leaders of the company should be committed to a renewed focus on government relations , prepared to budget time for implementation of the strategy, and willing to travel to various jurisdictions, visiting with leaders in key jurisdictions and within their home communities. The company should have high visibility at annual events or conferences where a sizeable number of relevant stakeholders in that jurisdiction gather.

Successful businesses are also committed to putting time and energy into coalition building and even developing relationships with NGOs. A business with a renewed emphasis on government relations should also begin to consider developing its own grassroots organization base that would allow the corporation whenever appropriate or necessary to mobilize employees, stockholders, retirees, suppliers, vendors, customers or clients over an important government affairs cause.

An effective media and press relations strategy also is always part and parcel of a strong government relations operation. Electronic, print and social media are all highly capable of driving governmental action; a press and media relations team and strategy for the company will be essential.

 Any expansion of government relations should be done in conjunction with a thorough examination of the relevant ethics, conflicts of interest matters.

Conclusion

A company expanding its government relations department is making a smart and necessary investment and must be in it for the long term. Businesses should walk before they run in the following manner: (1) build a strong internal office with talented, experienced full-time staff; (2) invest in highly reputable contract lobbyists to be their government affairs ambassadors in key jurisdictions; (3) become active in national and EU trade associations; (4) develop local relationships; (5) set a priority agenda concerning issues of importance currently in the legislative and regulatory arenas; (6) develop “outside” strategies to advance that agenda; (7) ensuring full compliance with all applicable ethics laws and regulations.

A major goal of expanding government relations operations is that ultimately, the company will be more in control of addressing legislative and regulatory issues of importance and have more control over its own reputation among political stakeholders.