International Insider – March 2019

26 Mar, 2019

Corporate Foreign Policy for Public Affairs

As companies expand their global reach and integrate their operations in foreign markets, they often face challenges created by a country’s political and economic environment. At the same time, these firms have their own set of economic goals, policy views and other interests that need to be articulated and negotiated in different regions of the world.

If this makes corporations sound like countries, it’s intentional. In fact, there are close parallels between the core pillars of foreign policy and the key components of a global public affairs strategy. At least four of these pillars can be translated into business language: prosperity and market access, defense and security, guiding principles, and development. More about these parallels:

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  1. Prosperity and market access is…market access. Many of today’s international alliances are based on favorable economic relationships between foreign governments. In parallel, the main role of a global public affairs function is to create, maintain and grow market access (and profits) for its organization’s business abroad. Market access often depends on an effective government relations strategy that creates positive in-market legislative, regulatory and public perception outcomes. These positive outcomes are driven by robust internal processes that encourage cross-functional collaboration, goal setting and prioritization, strategy development and an evaluation of tactics required to achieve economic goals.
  2. Defense and security is…risk and issues management. A carefully thought-out issues management process is your public affairs function’s best defense. This process involves environmental scanning for political and economic risk points that could present in-market operational challenges, situational analysis, and a unified strategy with business units for optimal ways to respond to both threats and opportunities. Training your army (of staff members) is essential to developing a strong system for preventing, mitigating and managing crises in international markets.
  3. Guiding principles are…value propositions and messaging. What does your organization or business stand for? What are the top policy priorities that facilitate and guide your operations abroad? While a country or a state’s guiding principles might be focused on democracy or human rights, the role of a global public affairs function is to show its commitment to transparency, compliance and respect for policy priorities in markets of interest, such as multilateral climate change initiatives or country-specific economic development programs. Framing your global, regional and local messaging clearly, as well as choosing appropriate communications channels, will favorably position your organization’s value proposition abroad.
  4. Development is…corporate responsibility and community engagement. A country’s development strategy aims to spread its values and have a positive influence overseas. Corporate responsibility is no different and provides your company a chance to make valuable contributions to the local communities where it operates. This element of global stakeholder engagement should be woven into the annual public affairs strategy and aligned with the business’s overarching goals, both on a global scale as well as in specific regions.

Given the political and economic complexities of today’s global environment, a corporate foreign policy that clearly defines your organization’s goals and priorities is a must. That policy should provide tactical details on how the four pillars will be implemented to achieve cross-border success.

Want to learn more about developing a corporate foreign policy? Join me for a workshop discussing the synergy between foreign policy, business diplomacy and global public affairs on May 16. More information here.

Spotlight on: Public Affairs in Brazil
PATRI Public Affairs

Since his election on October 28, 2018, President Jair Bolsonaro has enjoyed a high degree of public confidence from an impressive majority of voters, despite the divisive campaign he led. Business and financial communities in particular have expressed their enthusiastic support for the liberal economic policies the new government promised to deliver. However, Bolsonaro’s approval rates have plummeted from 49 to 34 percent since his inauguration on Jan. 1 through mid-March, while disapproval rates jumped from 11 to 24 percent during the same period.

 

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Much of this change comes from self-inflicted wounds. The mostly inexperienced new administration is sharply divided over ideological and personal differences. One of the president’s earliest and strongest supporters was fired from his cabinet post as General-Secretary after only a few weeks in office. The strategic Ministry of Education is awash with infighting, and several key personnel have already been replaced. Cabinet members who come from the military have frequently had to intervene to pacify internal struggles, many of them involving the president’s three sons, who wield great influence with their father.

Despite continuously bullish stock markets, the real economy continues to perform sluggishly, with decreasing industrial output and stalled retail sales and infrastructure investments. While this poor performance should not be blamed on Bolsonaro, it further sours the collective mood. Most forecasts for GDP growth in 2019 have fallen from a projected 2.5 percent in January to 2 percent or less today. The President further amplifies discord with frequent Twitter tirades to promote his core constituency’s ultra-conservative cultural agenda, which faces fierce resistance from much of Brazilian society.

All of this can change dramatically if Congress passes the pension overhaul proposed by the new government, hailed by most business leaders and analysts as a positive change but unpopular among workers and public servants. Bolsonaro pledged to do away with what he calls “old politics” and has formed his cabinet without engaging in traditional negotiations with political parties – the usual quid pro quo of ministerial seats for lawmakers votes. However, by ignoring political parties in the process of passing the social security bill, which requires a three-fifths majority in both houses of Congress, he has made little headway. As a result, many investors, both foreign and national, are holding back until they see how well Bolsonaro performs in his most crucial test thus far.

It is likely that some form of pension reform will be approved, but if the original proposal is too watered down, it could lead to frustration. Moreover, there is a growing consensus that even if a good reform plan passes, the economic results will not be felt until 2020 and beyond. Because of these prospects and other potential ripples in the global economy, businesses are cautious. Bolsonaro has just returned from a relatively successful trip to Washington, where he was warmly received by President Trump. This could boost his self-confidence and help him take greater control over his confusion-prone team.

Bolsonaro still has enough public support to carry out the economic plans he promised to implement. However, as his political honeymoon nears its end, he must do much better moving forward to secure the platform that got him elected as President of Brazil.

Want more insights on public affairs trends in Brazil, Mexico, Chile and Argentina? Register for the Council’s webinar on April 23, featuring PATRI Public Affairs and Llorente & Cuenca.

Join the International Network Today!

Would your global colleagues benefit from joining the International Network, open exclusively to Council members? It’s never too late to join! The Network serves as a forum for sharing ideas and best practices, and members can direct specific queries to the entire group. Members also have access to sample global public affairs resources and Network-only briefings throughout the year. Pass this e-mail on to a colleagues who should take advantage of this opportunity!

Save the Date: Brussels Study Tour

The Council’s European office is hosting a study tour of Brussels, open to members on both sides of the Atlantic. The study tour will be held on May 16 and 17, and is a unique opportunity for public affairs senior executives to be immersed in the European Union’s public affairs, advocacy and lobbying environment right before the May 2019 European Parliamentary elections. More details and the two-day agenda can be found here. For questions, contact the European office’s managing director, Andras Baneth. Want to arrive early? Attend the True Lies and False Truths workshop scheduled for May 15.

Upcoming Executive Education Programs

Webinar: Public Affairs in Latin America
April 23, 2019, 11 a.m. – 12 p.m. EST

Join us for a briefing on public affairs in Latin America, focusing on Brazil, Mexico, Chile and Argentina. Our speakers will provide insights on political and economic trends affecting multinationals operating in the region, as well as tips and recommendations for tackling the biggest challenges facing global companies.

Workshop: Strategic Corporate Foreign Policy
May 16, 2019, 1 – 3:15 p.m. EST

A strategic corporate foreign policy is a must for any global public affairs function. Our experts will help you define your organization’s international strategy in this two-hour workshop, featuring sessions on strategic risk planning and business diplomacy, as well as a discussion of how to leverage global platforms for engagement opportunities that align with your organization’s overarching goals.

Webinar: Public Affairs in Canada
May 23, 2019, 11 a.m. – 12 p.m. EST

Join us for our annual briefing on Canada to learn more about the public affairs landscape and how it may change in the coming months. In this program, you’ll gain insight into best practices for navigating challenges often faced by multinationals operating in Canada, as well as hear case studies of successful regional advocacy campaigns.

Global and Regional Updates

Brexit: Having trouble keeping up with Brexit and where the negotiations stand? You’re not alone. BBC has put together a guide to help sort through the latest negotiation developments, as well as the potential implications of the final Brexit resolution. Bloomberg also provides a “Brexit Impact Tracker,” which is keeping tabs on how businesses with ties in both the U.K. and the EU are preparing for Brexit. This tool can be filtered by industry, and categorizes preparations as “relocations and closures,” “stockpiling,” “plans on hold,” “layoffs and staff movements” and “warnings.”

Transatlantic trends: Before Brexit disrupts the global economy, read the 2019 Transatlantic Economy report outlining the economic integration between the United States and Europe. The report provides hard data on both U.S. and European-sourced jobs as well as trade and investment in each of the 50 U.S. states, EU member states and other European countries. These insights are useful for policymakers, business leaders and global public affairs professionals on both sides of the Atlantic.

European Union: The Council is making it easier to navigate the public affairs landscape in the European Union. Earlier this year, the Foundation for Public Affairs released an updated report on Managing Government Affairs in the EU. The report provides an in-depth look at the practice of public affairs in Brussels and the EU, with strategic insights and tactical information about how to successfully conduct government affairs throughout the region. Download the report here for access to interviews with EU professionals, case studies from member companies and key issues to keep on your radar. Another useful resource for those working in Brussels is the “Best in Brussels 2019 Report” from Dober Partners and Ellwood Atfield, an independent resource for organizations wanting to identify, compare and choose the best partners in Brussels for their advocacy needs.

Elections galore: Several important elections are taking place over the next few months. Signal, a global affairs newsletter from Eurasia group, highlights the ones to watch, including presidential elections in Ukraine, Indonesia and Israel, local elections in Turkey, and parliamentary elections in India and the European Union. Later this fall, Canada’s federal elections could be interesting to watch, as Prime Minister Justin Trudeau finds himself in an unfavorable position after accusations of interference in the country’s justice system. Want more insights on the political landscape in Canada? Global Public Affairs, a Canada-based public affairs firm and Council member, will provide their expertise on May 23. Register here.