HOW THE CORPORATE SECTOR ORGANISES ITS EU AND BRUSSELS PUBLIC AFFAIRS CAPABILITY

Source: Watson Helsby and Viapublic: www.watsonhelsby.co.uk

To read the full report: http://www.watsonhelsby.co.uk/insights-and-publications/getting-your-voice-heard-in-brussels

If you are trying to drive and shape the agenda, you need to have someone on the ground to make sure you are in the right discussions.

There are a number of factors that influence this decision. They are:

- Volume of policy / regulation directly relevant to the business. In other words, how much political risk is inherent in the policy and regulatory agenda in Brussels for a particular company/sector? If a vast bulk of the regulation affecting a company originates from Brussels (e.g. environmental, tax, trade deals), and it represents an existential threat to the business, then it is important to have an office there.

- How easy it is to access Brussels. Corporations based outside Europe, in the US or Asia-Pacific for instance, but with a significant presence in Europe (Ford, Microsoft, IBM) all have offices in Brussels, since regular travel to Brussels is both impracticable and prohibitively expensive

- The significant cost and bureaucratic hassle of setting up an office in Brussels. Brussels employment laws create an expense that not all companies wish to invest in. Is it absolutely necessary?

- The trade-off between having someone in Brussels who may be removed from the business and its leaders versus having someone close to the business but not on the ground in Brussels. This trade-off may not exist for some companies but it is a dilemma that a number of companies highlight.

If you are not living and breathing it, you are selling your company short.

Those companies who do not believe a permanent presence in Brussels is necessary based their EU public affairs and policy function at group HQ. They take the view that regular trips to Brussels (2-4 days every fortnight), often taking senior executives with them, works effectively. Indeed not only does it work, it is seen as desirable, because it keeps the public affairs function closely aligned with, and plugged into, the strategic priorities of the business and its leaders. This tends to lead to a more nuanced appreciation of how policy and regulation may affect the business, the internal stakeholders who need to be informed and involved and how best to use them in the process.

Size of EU Office

Brussels based EU offices tend to be small and standalone and they have no purpose other than to monitor and influence policy and regulation. Hence they are not comparable to other conventional operational units – they are, in effect, a single purpose functional unit. The large US multi-nationals tend to have the biggest offices, though a number of Asian companies have expanded their presence over recent months. However, unusually, some of them include other EMEA/ European corporate functions in the office, as they have chosen Brussels as the location for their European hub. If a company has a Brussels office the person running it is rarely the most senior EMEA/European public affairs person. It is more likely to be a Head of Office, ‘on the ground’, who will report either to a more regional or global senior public affairs head, or to a group corporate affairs director, or a regional CEO. For those companies with a Brussels based public affairs team this, on average, comprises about half of the total EU/European public affairs resource (in some cases as low as 20% and in some cases 100%). The remainder of the team tends to be based in-country, normally located in the bigger/key markets. This is because most companies recognise the importance of 1/ monitoring and influencing policy within the Member States and developing relationships with politicians and officials within them and 2/ providing counsel and advice to the MDs of the businesses within them

Reporting Lines

There are no hard and fast rules but certain observations can be confidently made:

• Those that report to a Group-level or regional President/CEO tend to be more senior/heavyweight
• The more heavily regulated the sector (financial services, technology), the stronger the likelihood of a reporting line into Legal/General Counsel.
• Those working in regional (European/EMEA) roles within global multi-nationals domiciled outside Europe are more likely to report to a Global VP of Government Relations (who reports in through legal function) or to a regional CEO.
• Those working for a company domiciled in mainland Europe, in most cases, report to the Group Director of Corporate Affairs (i.e. broad stakeholder/ reputation management remit rather than a legal/compliance remit) or a company official in a similarly senior role, who in turn report directly to the CEO or another Member of the Management Board.
• The role tends to be closer to the CEO/executive committee in European companies than it is in US companies where it is often a further step removed. Though this is a structural/hierarchical phenomenon, it is also probably a physical one too.

Reporting line, does matter since it fundamentally determines the approach and focus of the public affairs/government relations agenda. Restructurings and changes in reporting lines that affect EU public affairs are not uncommon.

Public affairs is not a controlling function. It’s about relationship building, influencing, optimising commercial opportunities and protecting / growing license to operate.

Use of Consultancies

The majority of companies (65%) and their respective Brussels/European public affairs head do use a consultancy, mainly on a retainer but some on a project only basis. Sometimes it is for very specific intelligence, such as insights into particular Commission Directorate Generals

Salary Ranges

Salary levels vary according to staff responsibility, company size and experience/ status. Public affairs heads of an office with no or only administrative staff tend to be paid salaries that would correspond to senior manager levels in bigger offices – between € 80,000 and € 130,000 annually. The majority (69%) earn a salary between € 130,000 and € 300,000, though with the remainder equally split below and above this range.