While businesses will always hold some semblance of a traditional hierarchy, modern day requirements, from both policy and social perspectives, is leading to new positions and structures in order to best meet these expectations.
Social and moral obligations are one thing, but in a year where there are dozens of elections underway across the globe, there is no better time to install a board position dedicated to the ever-changing intricacies of politics.
Businesses have always needed to be abreast of political movements. They need to be aware of shifting tides, being on top of current affairs and keeping a network of contacts or employees who can distil and communicate political developments, but it’s a massive undertaking, and only getting more taxing as political uncertainty grows.
A Chief Political Officer carries two main responsibilities:
A CPO is the strategic point of contact for business-to-government relations. They communicate with representatives on business-relevant topics and look critically at new or proposed policies to identify their benefits, drawbacks and subsequent impact on the organisation.
In some cases, a CPO will lobby for policy change in the best interests of their stakeholders (everyone from employees to shareholders to consumers), and depending on their network and experience, may also be deployed to advise on policies during their development.
Once the policy takes hold, the CPO will then take the relevant information and translate it into a strategic approach for the organisation. They’ll create the roadmap to achieving policy goals and compliance, advise the Board on impact to operations and objectives, and work closely with other members of C-Suite to cascade actions down.
Reading and parsing policy is one thing, but a CPO also needs to have the ability to confidently read the world of global affairs and predict how large-scale issues will impact their business. How might a war affect supply? What would the differences be depending on which side wins the US election? A good CPO will be able to predict and react to these events swiftly and confidently.
With the full picture in view, the CPO is a significant function for any organisation. So, why aren’t there more of them?
Typically, the function of a CPO that we discussed above would likely be given to a Director of Public or Corporate Affairs title. However, these roles are not on a company’s board, which might be a shortsighted decision.
Board level is where policy and political changes can often be most felt, where strategy and resource is allocated, and where leaders have a deeply vested interest in lobbying. Directors aren’t always privy to the necessary conversations.
This may sound obvious, but board conversations pertain to the entire business at large, and nothing impacts a business in its entirety quite like political developments. New legislation regarding taxation and regulation can have a massive impact on a business’ operations, and having this information made clear to the board as quickly as possible can be a huge benefit.
Response Speed
By having the CPO’s firsthand rundown of relevant political developments, businesses can optimise their response speed, as this information doesn’t need to trickle into board meetings through other channels. If a piece of legislation was signed into effect on Monday, the CPO could bring this up to the board on Tuesday with an action plan already laid out.
However, if this information needs to be passed up the flagpole, it will take precious time for the board to even know what’s going on, let alone piece together a response strategy. With a CPO on the board, decisions can be made in hours rather than days.
It’s a good question. For all the benefits, not every business will need a CPO. This is a vastly strategic role with complex requirements and diplomacy, much of which will cross regions and/or sectors.
Businesses in heavily regulated industries will see the most impact from the role. The likes of FMCG, finance, energy, healthcare, manufacturing and more. These sectors not only see huge volumes of policy, regulation and scrutiny, but often feel their effect across revenue, structure, and in particular, reputational strength.
In fact, reputation is a significant factor in weighing up whether a CPO could be a shrewd decision. How a corporation responds to regulations and geopolitical movement will play a critical role in the way that brand is perceived – externally and internally. Organisations that have a lot at stake could well consider deploying a CPO to help protect their reputation, alongside their Chief Communications Officer (CCO).
Smaller brands or businesses that aren’t as heavily monitored by governmental and regulatory bodies may not see the same levels of return and needs are likely to be met by a Director of Public or Corporate Affairs.
To Have or To Have Not
The Chief Political Officer is the custodian for all political matters within a company or organisation – and they have sway, access and can move at pace. Whilst for many organisations, the breadth of their operations may not require a CPO. Yet. But there are many that do and the landscape is changing at an incredible speed, and globalisation is affecting every corner of business practice. And in all likelihood, as we see that increase, the Chief Political Officer could soon become a much more common role within the business world, and one which will have far reaching benefits.
If you’re looking for more insights into the CPO and other Executive functions, contact Janie Emmerson.
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