360: How to assess your level of political exposure
The higher your level of political exposure, the more need there is to engage with government and politics. Without this engagement, you are failing to manage your risks. But how do you assess what your level of political exposure is and how seriously you should take your public affairs?
Whilst I would always say that organisations need to invest in their public affairs as they all have some policy and operational risk to manage, the reality is that some are more exposed than others.
There appears to be four main categories of increased exposure:
- Traditional exposure – that comes largely with regulation, so those in regulated sectors need to ensure that a range of stakeholders know and understand their operations. New sectors can be drawn into regulations – take social media and soon football – whilst those more used to regulation can see that regulation increased. For others, this traditional exposure is prevalent because they need to campaign on behalf of, for instance, a specific group. In other words, they are looking to secure change and that can only come about through politics.
- Public opinion – often because of campaigning, industries or companies can find that their level of exposure increases. As public opinion is raised, the level of political interest increases as does the risk of potential new policy. That public opinion could come about because of the actions of others, possibly competitors.
- Commercial – organisations must engage with government because there is some form of commercial relationship in place. For some sectors, it will be necessary to inform government about new technologies or improvements to existing arrangements. It is also critical that reputations are managed throughout as well.
- Self-imposed – many companies are choosing to speak more openly about social issues. That can increase their level of political exposure. Careful decisions need to be taken before such positions are announced. They certainly need to be genuine and are, according to some reports, demanded by some, often younger, groups of consumers. But it always comes with some political risk. This may not come from the government but maybe those in opposition.
The most critical element starts by assessing your initial risks – looking at these categories to start with – but then tracking changes over time as well. For instance, your public opinion category may barely register but P&O Ferries then make an announcement and that potentially changes your political risk as well.
This means that, as a minimum, any organisations should be:
- maintaining a constant watch through good media and political monitoring;
- talking to stakeholders on an ongoing basis to gain feedback; and
- ensuring that government understands you and your issues.
Many organisations do not consider their political exposure. They simply do or do not do public affairs. Considering exposure should be part of any initial assessment and play a role in strategy development. It will help in everything from timing through to resource allocation. It could well change over time, and this too needs to be considered in a strategy.
What is your level of political exposure?