78 percent of US corporations describe today’s political environment for companies as extremely challenging or very challenging, according to a new survey by The Conference Board Governance & Sustainability Center. This reflects a shift in sentiment toward the negative: In an Governance & Sustainability Center survey conducted in 2021, just 47 percent of companies described the political environment as extremely challenging or very challenging.
The new poll, which took the pulse of government relations executives and chief legal officers, also found that nearly half (42 percent) expect a more challenging landscape in the next three years. What’s fueling this tough environment, both now and down the road? Topping the list are:
At the same time, corporate America is divided on the role corporations should play in improving the political environment. About 30 percent of respondents say business should take a leadership role in improving the political environment; about 30 percent say it should provide a supporting role; about 30 percent say it should play a minimal role; and just 7 percent say business should not participate at all, and instead focus exclusively on its own interests.
Government relations executives and chief legal officers (100 in total) participated in the survey between October and December of 2022. More than half are from companies with over $10 billion in annual revenue, and over one-third are from companies with over $25 billion in annual revenue.
The survey results are part of a report by The Conference Board, released today, that provides insights on the current and future political environment for corporations, the steps that companies can take to improve the environment, and ways to improve the effectiveness of corporations’ PACs, direct political contributions, and government advocacy in the current climate. The insights are derived from the survey findings, a roundtable with corporate executives, and secondary research.
“The combination of a polarization among policymakers, coupled with extremely close elections, means that companies are facing potentially wide swings in government policy with each election, which is not conducive to business planning and investment,” said Paul Washington, Executive Director of The Conference Board Governance & Sustainability Center. “At the same time, many companies are understandably hesitant to speak out about certain issues because they can be attacked for going too far or not far enough. In this environment, look for companies to focus on areas where there can be little objection: promoting voter registration and participation in elections, as well as supporting policymakers who focus on problem-solving.”
Insights and findings from the report, which was produced with the support of Altria, Prudential Financial, Inc., Sempra, and Steptoe & Johnson LLP, include:
Current Political Environment for Companies
Q: How would you describe the political environment for companies in general today?
Q: What factors do you think are contributing to making the political environment for corporations challenging now? (please choose top five):
Future Political Environment for Companies
Q: In the three years from now (i.e., 2025), do you think the political environment will be:
Q: Which of the following are you most concerned about increasing in the next three years? (please choose the top five):
Q: Over the next 3-5 years, do you expect a backlash from your corporation's advocacy on social and environmental issues from any of the following? (select all that apply):
The Role of Business in Improving the Political Environment
Q: What kind of role do you see companies playing in improving the political environment?
Q: Which of the following are ways that, in your view, business can improve the political environment? (please check all that apply):
Recommendations for Companies: Improving the Political Environment
“In this contentious and rapidly changing political environment, companies must have clear processes and guidelines to evaluate how they might thoughtfully respond to social issues impacting their employees and customers,” said Wesley Bizzell, Senior Assistant General Counsel and Managing Director of Political Law and Ethics Programs from Altria. “Engagement can take many forms, but one way companies can leverage their policy influence and address potential risks is by working with broad-based business coalitions that are banding together to advocate for change. However, even these joint efforts need to be carefully considered by a cross-functional group of executives to ensure the company’s involvement is in line with its core principles and faithful to the company’s history and culture.”